UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-K


            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended October 31, 2001

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

             For the transition period from __________ to__________
                                -----------------
                         Commission File Number 1-4146-1
                                -----------------


                         NAVISTAR FINANCIAL CORPORATION
             (Exact name of Registrant as specified in its charter)

            Delaware                                    36-2472404
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

           2850 West Golf Road
         Rolling Meadows, Illinois                                        60008
(Address of principal executive offices)                              (Zip Code)

         Registrant's telephone number, including area code 847-734-4000

        Securities registered pursuant to Section 12(b) of the Act: None

        Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes X No__

As of November 30, 2001, the number of shares  outstanding  of the  registrant's
common stock was 1,600,000.

THE   REGISTRANT  IS  A  WHOLLY-OWNED   SUBSIDIARY  OF  NAVISTAR   INTERNATIONAL
CORPORATION AND MEETS THE CONDITIONS SET FORTH IN GENERAL  INSTRUCTION  I(1) (a)
AND (b) OF FORM  10-K  AND IS  THEREFORE  FILING  THIS  FORM  WITH  THE  REDUCED
DISCLOSURE FORMAT.

<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                                    FORM 10-K

                           Year Ended October 31, 2001

                                      INDEX
                                                                            Page
PART I

Item  1.Business (A).....................................................      1
Item  2.Properties (A)...................................................      1
Item  3.Legal Proceedings................................................      1
Item  4.Submission of Matters to a Vote of
               Security Holders (A)......................................      1

PART II

Item  5.Market for the Registrant's Common Equity and
               Related Stockholder Matters...............................      1
Item  6.Selected Financial Data (A)......................................      2
Item  7.Management's Discussion and Analysis of Financial
               Condition and Results of Operations (A)...................      2
Item  7A.Quantitative and Qualitative Disclosures About Market Risk......     11
Item  8.Financial Statements.............................................     12
               Statement of Financial Reporting Responsibility...........     38
               Independent Auditors' Report..............................     39
               Supplementary Financial Data..............................     40
Item  9.Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure.......................     43

PART III

Item 10.Directors and Executive Officers of the
               Registrant (A)............................................     43
Item 11.Executive Compensation (A).......................................     43
Item 12.Security Ownership of Certain Beneficial Owners
               and Management (A)........................................     43
Item 13.Certain Relationships and Related
               Transactions (A)..........................................     43

PART IV

Item 14.Exhibits, Financial Statement Schedules and
               Reports on Form 8-K.......................................     43

SIGNATURES- Principal Accounting Officer ................................     44
                    - Directors..........................................     45
POWER OF ATTORNEY........................................................     45
INDEX TO EXHIBITS........................................................    E-1

(A)-  Omitted or amended  as the  registrant  is a  wholly-owned  subsidiary  of
Navistar International Corporation and meets the conditions set forth in General
Instructions I(1) (a) and (b) of Form 10-K and is,  therefore,  filing this Form
with the reduced disclosure format.
<PAGE>


                                     PART I

Item 1.  Business

     The registrant, Navistar Financial Corporation ("NFC"), was incorporated in
Delaware in 1949 and is a  wholly-owned  subsidiary of  International  Truck and
Engine Corporation  ("International").  As used herein, the "Corporation" refers
to Navistar Financial  Corporation and its wholly-owned  subsidiaries unless the
context otherwise requires.

     The  Corporation  is a  commercial  financing  organization  that  provides
wholesale,  retail and lease financing in the United States for sales of new and
used trucks sold by International and International's  dealers.  The Corporation
also finances  wholesale  accounts and selected  retail  accounts  receivable of
International. Sales of new products (including trailers) of other manufacturers
are also financed  regardless of whether  designed or  customarily  sold for use
with International's truck products.

     On  November  30,  2000,  the  Corporation's  Board of  Directors  approved
management's plan for the sale of Harco National  Insurance  Company  ("Harco"),
the  wholly-owned  insurance  subsidiary.  On November 30, 2001, the Corporation
completed  the sale of all of the  stock of Harco to IAT  Reinsurance  Syndicate
Ltd., a Bermuda reinsurance company.  Cash proceeds of $62 million were received
on November 30, 2001.  Harco provides  commercial  physical damage and liability
insurance coverage to International's  dealers and retail customers,  and to the
general public through an independent  insurance  agency system.  As a result of
this plan of disposal,  the 1999 financial statements have been restated and the
results of operations of Harco have been reported as Discontinued Operations.

Item 2.  Properties

     The Corporation's  properties  principally  consist of office equipment and
leased office space in Rolling Meadows,  Illinois;  Duluth,  Georgia and Frisco,
Texas.  The  office  equipment  owned  and  in use  by  the  Corporation  is not
significant in relation to the total assets of the Corporation.

Item 3.  Legal Proceedings

There were no material pending legal  proceedings  other than ordinary,  routine
litigation incidental to the business of the Corporation.

Item 4.  Submission of Matters to a Vote of Security Holders

     Intentionally  omitted.  See the index page of this Report for explanation.

                                    PART II

Item 5.  Market for the Registrant's Common Equity and Related Stockholder
         Matters

     See Note 11 to Consolidated Financial Statements.
<PAGE>

Item 6.  Selected Financial Data

     Intentionally omitted. See the index page of this Report for explanation.


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

     Certain   statements   under  this   caption,   which   involve  risks  and
uncertainties,  constitute  "forward-looking  statements"  under the  Securities
Reform  Act.  Navistar  Financial   Corporation's   actual  results  may  differ
significantly  from the results  discussed in such  forward-looking  statements.
Factors  that might  cause such a  difference  include,  but are not limited to,
those  discussed under the headings  "Business  Outlook" and  "Quantitative  and
Qualitative Disclosures About Market Risk."

Financing Volume

     Customer  demand for Class 5 through 8 trucks in fiscal  2001 was 29% lower
than  2000 and 33%  lower  than  1999.  Financing  support  provided  to  retail
customers over the last three years was as follows:

                                                 2001          2000         1999
Retail and Lease Financing:                               ($ millions)
Finance market share of new International
   trucks sold in the U.S.                      15.4%         16.4%        16.4%

Purchases of receivables and
   equipment leased to others                    $997        $1,475       $1,526

Net serviced retail notes and lease
   financing balances (including
   sold notes) at October 31                   $2,992        $3,296       $3,003

     During  fiscal year 2001,  the  Corporation's  finance  market share of new
International  trucks  sold in the U.S fell  below  2000  market  share due to a
decrease in the heavy truck  market  share.  The  purchase  of  receivables  and
equipment  leased to others declined 32% from 2000 levels primarily due to lower
industry demand. Purchases of receivables and equipment leased to others in 2000
declined 3% from 1999 as a result of lower truck industry demand.

<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations (continued)

Financing Volume (continued)

     Financing support provided to  International's  dealers over the last three
years was as follows:

                                                 2001          2000         1999
Wholesale Financing:                                      ($ millions)
Percent of wholesale financing of
   new International trucks sold to
   International's dealers in the U.S.            96%           96%          96%

Purchases of receivables                       $2,804        $4,119       $4,188

Serviced wholesale note balances
   (including sold notes) at
   October 31                                    $817        $1,115       $1,226

     The Corporation's  finance  percentage of new International  trucks sold to
International's  dealers  remained  at 96% in 2001.  The  volume of  receivables
purchased in 2001 was 32% lower than 2000  primarily due to a decrease in dealer
inventory  levels  in  response  to lower  industry  retail  sales.  Receivables
purchased  decreased  2% in 2000 from 1999  levels as industry  demand  declined
during the last half of fiscal year 2000.

Results from Continuing Operations

     Results  from  continuing  operations  over the last  three  years  were as
follows:
                                                 2001         2000          1999
                                                          ($ millions)
     Revenue                                     $304          $308         $282
     Cost of borrowing                            102           110           95
     Income before taxes                           72            92           96
     Net income                                    46            56           59

     Return on average equity                   14.8%         18.9%        21.0%


     The  decrease in the  Corporation's  return on average  equity from 2001 to
2000 was primarily the result of lower average finance  receivable  balances and
higher retail losses,  offset,  in part, by higher gains on sales of retail note
receivables.  The decrease in 2000 from 1999 was due primarily to lower gains on
sales of retail  note  receivables  and  higher  losses  on retail  receivables,
offset, in part, by higher average finance receivable balances.
<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations (continued)


Results from Continuing Operations (continued)

     Retail note  financing  revenue for 2001 was $81 million  compared with $79
million and $85 million in 2000 and 1999, respectively.  The increase in 2001 is
primarily  the result of higher  gains on the sale of retail  note  receivables.
Gains on the sales of retail note receivables  were $21 million,  $3 million and
$12  million in 2001,  2000 and 1999,  respectively.  The higher  gains on sales
resulted primarily from higher margins on retail notes.

     Lease financing  revenue for 2001 was $99 million compared with $94 million
and $76  million in 2000 and 1999,  respectively.  Included  in lease  financing
revenue is operating  lease revenue of $81 million,  $75 million and $62 million
in 2001, 2000 and 1999, respectively. The higher operating lease revenue in 2001
is primarily the result of higher average operating lease balances.

     In fiscal 2001 wholesale note revenue decreased 28% to $46 million compared
to 2000,  primarily due to lower average serviced wholesale balances and a lower
prime rate.  Wholesale  note  revenue  increased  3% in 2000 to $64 million as a
result of the higher  level of wholesale  financing  activity and an increase in
the average prime interest rate.

     Retail and wholesale account revenue for 2001 was $28 million compared with
$43 million and $36 million in 2000 and 1999, respectively. The decrease in 2001
is primarily the result of lower average receivable balances.

     Marketable securities revenue was $23 million in 2001 compared to less than
$1 million in 2000 and 1999.  The  increase was  primarily  the result of higher
average  restricted  marketable  securities  balances  held  as  collateral  for
borrowings under the revolving retail warehouse facility.

     Borrowing  costs  decreased 7% in 2001 to $102 million from $110 million in
2000 primarily due to lower average  receivable  funding  requirements and lower
average interest rates.  Accounts payable to affiliates  reduced debt levels and
resulted in a reduction  in borrowing  costs of $4 million,  $16 million and $13
million  for  fiscal  years  ending  2001,  2000  and  1999,  respectively.  The
Corporation's  weighted average interest rate on all debt was 5.7% in 2001, 6.4%
in 2000 and 5.6% in 1999.  The decrease in the  Corporation's  weighted  average
interest rate is primarily a result of the lower LIBOR rates, offset by slightly
increased credit spreads.  Borrowing costs increased 16% in 2000 to $110 million
from $95 million in 1999  primarily  due to higher  average  receivable  funding
requirements  and higher interest rates.  The ratio of debt to equity was 5.0:1,
6.2:1, and 6.1:1 at October 31, 2001, 2000 and 1999, respectively.

<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations (continued)


Results from Continuing Operations (continued)

     The  provision  for  losses on  receivables  totaled  $28  million  in 2001
compared  with $12 million in 2000 and $6 million in 1999.  The increase in 2001
compared to 2000 is  primarily  due to an increase  in  repossession  volume and
pricing pressure in the used truck market. Notes and account write-offs,  net of
recoveries,  including sold notes, were $24 million in 2001, $12 million in 2000
and $5 million in 1999. The  Corporation's  allowance for losses as a percentage
of serviced  finance  receivables  was .71%,  .54% and .55% at October 31, 2001,
2000 and 1999, respectively.

     Depreciation  and other  expenses in 2001 increased to $61 million from $55
million in 2000 and $44 million in 1999. The increase is primarily the result of
higher  depreciation on a larger average  investment  balance in equipment under
operating leases.

Results from Discontinued Operations

     On  November  30,  2000,  the  Corporation's  Board of  Directors  approved
management's plan for the sale of Harco National  Insurance  Company  ("Harco"),
the  wholly-owned  insurance  subsidiary.  On November 30, 2001, the Corporation
completed  the sale of all of the  stock of Harco to IAT  Reinsurance  Syndicate
Ltd., a Bermuda reinsurance company.  Cash proceeds of $62 million were received
on November 30, 2001.  Harco provides  commercial  physical damage and liability
insurance coverage to International's  dealers and retail customers,  and to the
general public through an independent  insurance  agency system.  As a result of
this disposal,  the 1999 financial statements have been restated and the results
of operations of Harco have been reported as Discontinued Operations.

     The net  cumulative  pretax loss on the disposal of Harco for 2001 and 2000
is estimated to be approximately $4 million. This includes the estimated gain on
sale of $1 million, $4 million of severance and other exit costs, and $1 million
of curtailment  loss associated  with the related future  reduction of employees
from the Corporation's postretirement benefit plans.

     Revenues of Harco were $62 million,  $56 million and $44 million for fiscal
2001, 2000 and 1999, respectively.

Liquidity and Funds Management

     The Corporation has  traditionally  obtained the funds to provide financing
to  International's  dealers  and retail  customers  from sales of  receivables,
commercial paper, short and long-term bank borrowings, medium and long-term debt
and equity capital.  The  Corporation's  current debt ratings have made sales of
finance receivables the most economical source of funding.

     In May 2001,  Moody's  and Fitch  lowered  the  Corporation's  senior  debt
ratings to Ba1 and BBB- from Baa3 and BBB, respectively.  Fitch also lowered the
Corporation's subordinated debt ratings to BB from BBB-.
<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations (continued)


Liquidity and Funds Management (Continued)

     Operations  used $134 million of cash in 2001  primarily as a result of the
decrease of $252 million in accounts payable to affiliates. Financing activities
used $244 million to primarily decrease the bank revolving credit facility usage
and the revolving retail warehouse facility. To fund the cash used by operations
and financing  activities,  investing  activities  provided $358 million in cash
during this period primarily as a result of the sale of retail notes,  offset by
the purchases of retail notes and lease receivables. See also the "Statements of
Consolidated Cash Flow" on page 15.

     Over the last three years, operations provided an aggregate of $203 million
in cash,  and  proceeds  from  the sale of  retail  receivables  totaled  $3,388
million.  These  amounts were used  principally  to fund the purchase of finance
receivables and equipment  leased to others of $3,773 million,  net of principal
collections on the receivables, and to pay dividends of $109 million.

     Receivable  sales were a  significant  source of funding in 2001,  2000 and
1999.  Through the asset-backed  public market and private  placement sales, the
Corporation  has been able to fund fixed rate retail note  receivables  at rates
offered to companies with higher  investment grade ratings.  During fiscal 2001,
the  Corporation  sold $1,365 million of retail notes,  net of unearned  finance
income,  through Navistar Financial Retail Receivables  Corporation ("NFRRC"), a
special purpose,  wholly owned subsidiary of the Corporation,  in three separate
sales.  The Corporation sold $765 million of retail notes in November 2000 to an
owner trust which, in turn, issued  securities that were sold to investors.  The
Corporation  also  sold  $200  million  of retail  notes in  December  2000 to a
multi-seller   asset-backed  commercial  paper  conduit  sponsored  by  a  major
financial  institution.  Over the three month  period  ending in June 2001,  the
Corporation  sold $400 million of retail notes to an owner trust which, in turn,
issued $400  million of  asset-backed  securities  that were sold to  investors.
Aggregate gains of $21 million were recognized on the sales. During fiscal 2000,
the Corporation  sold a total of $1,008 million of retail notes, net of unearned
finance income,  through NFRRC, in two separate sales. The Corporation sold $533
million  of  retail  notes in  November  1999 to two  multi-seller  asset-backed
commercial  paper conduits  sponsored by a major financial  institution and $475
million of retail  notes in March 2000 to an owner trust  which,  in turn,  sold
notes to investors.  Aggregate gains of $3 million were recognized on the sales.
During fiscal 1999,  the  Corporation  sold a total of $1,260  million of retail
notes, net of unearned finance income, through NFRRC, in two separate sales. The
Corporation sold $545 million of retail notes in November 1998 to a multi-seller
asset-backed commercial paper conduit sponsored by a major financial institution
and $715 million of retail notes in June 1999 to an owner trust which,  in turn,
issued  securities which were sold to investors.  Aggregate gains of $12 million
were recognized on the sales. Over the period November 1, 2001, through December
10, 2001,  the  Corporation  sold $470 million of retail notes,  net of unearned
finance  income,  through  NFRRC  to an  owner  trust  which,  in  turn,  issued
securities  which were sold to investors.  A $16 million gain was  recognized on
this sale.
<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations (continued)


Liquidity and Funds Management (continued)

     At October 31, 2001, Navistar Financial Securities  Corporation ("NFSC"), a
wholly-owned  subsidiary of the Corporation,  had in place a revolving wholesale
note trust that funded $797 million of eligible  wholesale  notes. As of October
31,  2001 the trust was  comprised  of three $200  million  tranches of investor
certificates maturing in 2003, 2004 and 2008, a $212 million tranche of investor
certificates  maturing in 2005 and a variable funding certificate with a maximum
capacity of $200 million.  This facility expires in January 2002, with an option
for renewal.

     At October 31, 2001, Truck Retail Accounts Corporation  ("TRAC"), a special
purpose,  wholly-owned  subsidiary of the Corporation,  had in place a revolving
retail account conduit that provides for the funding of $100 million of eligible
retail accounts. As of October 31, 2001 the Corporation had utilized $91 million
of this  facility.  The  facility  expires  in August  2002  with an option  for
renewal.

     At  October  31,  2001,  Truck  Engine  Receivables  Financing  Corporation
("TERFCO"),  a special  purpose,  wholly-owned  subsidiary  of the  Corporation,
provided for funding of $100 million of eligible Ford accounts receivables.  The
funding  facility is due in 2005.  As of October 31,  2001 the  Corporation  had
utilized $100 million of this facility.

     At October 31, 2001, the Corporation had a $500 revolving  retail warehouse
facility due in October 2005. On October 16, 2000, Truck Retail Instalment Paper
Corporation   ("TRIP"),  a  special  purpose  wholly-owned   subsidiary  of  the
Corporation, issued $475 of senior class AAA rated and $25 of subordinated class
A rated  floating rate  asset-backed  notes.  The proceeds were used to purchase
eligible  receivables  from the  Corporation  and  establish a revolving  retail
warehouse facility for the Corporation's  retail notes and retail leases,  other
than fair market value leases.

     During  fiscal  2001,   2000  and  1999,  the   Corporation   entered  into
sale/leaseback agreements with third party financiers involving vehicles subject
to retail  finance  leases and operating  leases with end users.  Total proceeds
were  $118  million,  $137  million  and $160  million  in 2001,  2000 and 1999,
respectively. The outstanding capital lease obligations at October 31, 2001 were
$361 million.

     The  Corporation  manages its exposure to fluctuations in interest rates by
limiting  the  amount  of fixed  rate  assets  funded  with  variable  rate debt
generally  by  selling  fixed  rate  receivables  on a fixed  rate  basis and by
utilizing   derivative   financial   instruments.   These  derivative  financial
instruments may include forward contracts, interest rate swaps and interest rate
caps.
<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations (continued)


Liquidity and Funds Management (continued)


     In November 1998, the Corporation  sold fixed rate retail  receivables to a
multi-seller   asset-backed  commercial  paper  conduit  sponsored  by  a  major
financial institution on a variable rate basis. For the protection of investors,
the  Corporation  issued an interest  rate cap. The  notional  amount of the cap
amortizes based on the expected outstanding principal balance of the sold retail
receivables.  Under the terms of the cap agreement,  the  Corporation  will make
payments if interest rates exceed certain levels. As of October 31, 2001 the cap
had a notional amount of $138 million and had an immaterial fair value.

     In November 1999, the Corporation  sold fixed rate retail  receivables on a
variable rate basis and entered into an amortizing  interest rate swap agreement
to fix the future cash flows of interest  paid to  lenders.  In March 2000,  the
Corporation  transferred  all the rights and obligations of the swap to the bank
conduit.  The notional  amount of the  amortizing  swap is based on the expected
outstanding principal balance of the sold retail receivables. Under the terms of
the  agreement,  the  Corporation  will make or  receive  payments  based on the
differential  between the  transferred  swap notional amount and the outstanding
principal balance of the sold retail receivables. The net settlement is included
in retail  notes  revenue.  As of October  31, 2001 the  difference  between the
amortizing swap notional amount and the net outstanding principal balance of the
sold  retail  receivables  was $32  million  and had a fair value of $1 million,
which  is  recorded  in  other  liabilities  on the  Statement  of  Consolidated
Financial Condition.

     In  October  2000,  the  Corporation  entered  into a $500  million  retail
revolving  facility as a method to fund retail notes and finance leases prior to
the sale of receivables.  Under the agreements of this facility, the Corporation
sells  fixed  rate  retail  notes or  finance  leases  to the  conduit  and pays
investors a floating rate of interest.  As required by the rating agencies,  the
Corporation  purchased an interest rate cap to protect  investors against rising
interest rates. To offset the economic cost of this cap, the Corporation sold an
identical  interest rate cap. As of October 31, 2001 the interest rate caps each
had a notional amount of $500 million and a net fair value of zero.

     In December 2000, the Corporation  sold fixed rate retail  receivables on a
variable rate basis and entered into an interest rate swap agreement.  Under the
terms of the agreement,  the Corporation  will make or receive payments based on
the   differential   between  the  transferred  swap  notional  amount  and  the
outstanding  principal balance of the sold retail  receivables and on changes in
the interest rates.  The net settlement is included in retail notes revenue.  As
of October 31, 2001 the difference  between the amortizing  swap notional amount
and the net outstanding  principal balance of the sold retail receivables was $3
million and had an immaterial fair value.


<PAGE>
Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations (continued)


Liquidity and Funds Management (continued)

     In July 2001, the Corporation  entered into an interest rate swap agreement
to fix a portion of its  floating  rate  revolving  debt.  This  transaction  is
accounted for as a cash flow hedge,  and  consequently,  gains and losses on the
derivative  are recorded in other  comprehensive  income.  Derivative  gains and
losses are  reclassified  from  other  comprehensive  income as the hedged  item
affects earnings. There was no ineffectiveness related to this derivative during
fiscal  2001.  As of October 31,  2001,  the  interest  rate swap had a notional
amount of $35 million and a fair value of $2 million, which is recorded in other
liabilities on the Statement of Consolidated Financial Condition.

     At October 31, 2001,  available  funding  under the bank  revolving  credit
facility, the revolving retail warehouse facility, the retail account facilities
and the  revolving  wholesale  note trust was $539  million.  When combined with
unrestricted cash and cash equivalents,  $561 million remained available to fund
the general business purposes of the Corporation.

New Accounting Standards

     On April 1, 2001 the Corporation adopted Statement of Financial  Accounting
Standards No. 140  "Accounting  for Transfers and Servicing of Financial  Assets
and Extinguishments of Liabilities".  The adoption of this statement has not had
and is not expected to have a material  effect on the  Corporation's  results of
operations,  financial  condition  or  cash  flows.  We  have  included  certain
disclosures in Note 4 to the  Consolidated  Financial  Statements to comply with
the requirements of this new statement.

Business Outlook

     Retail  deliveries of Class 5 through 8 trucks,  including school buses, in
the U.S. in fiscal 2002 is  forecasted to decrease  approximately  6% from 2001.
The competitive commercial financing market will continue to put pressure on the
Corporation's  retail and wholesale financing activity.  Increased volatility in
the capital  markets is likely to put  additional  pressure on the funding rates
available to the Corporation in the asset-backed public market, commercial paper
markets and other debt financing markets.

     Management  believes  that  collections  on  the  outstanding   receivables
portfolio plus cash available from the  Corporation's  various  funding  sources
will permit Navistar Financial Corporation to meet the financing requirements of
International's dealers and retail customers through 2002 and beyond.
<PAGE>

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

     The  Corporation is exposed to market risk primarily due to fluctuations in
interest  rates.  Interest rate risk arises from the funding of a portion of the
Corporation's  fixed rate  receivables  with floating rate debt. The Corporation
has  managed  exposure  to  interest  rate  changes  by  funding  floating  rate
receivables  with floating rate debt and fixed rate  receivables with fixed rate
debt,  floating  rate debt and equity  capital.  Management  has reduced the net
exposure which results from the funding of fixed rate  receivables with floating
rate debt by generally  selling fixed rate receivables on a fixed rate basis and
by utilizing  derivative  financial  instruments.  The Corporation  does not use
derivative financial instruments for trading purposes.

     The  Corporation  measures its  interest  rate risk by  estimating  the net
amount  by which  the fair  value of all  interest  rate  sensitive  assets  and
liabilities,  including derivative financial  instruments,  would be impacted by
selected  hypothetical changes in market interest rates. Assuming a hypothetical
10% increase in interest  rates as of October 31, 2001, the estimated fair value
of the net  assets,  excluding  net  assets of  Discontinued  Operations,  would
decrease by approximately $5 million.
<PAGE>

Item 8.  Financial Statements and Supplementary Data                        Page


   Navistar Financial Corporation and Subsidiaries:

     Consolidated Financial Statements:
        Statements of Consolidated Income and Retained Earnings
           for the years ended October 31, 2001, 2000 and 1999...........     12
        Statements of Consolidated Comprehensive Income for the
           years ended October 31, 2001, 2000 and 1999...................     12
        Statements of Consolidated Financial Condition as of
           October 31, 2001 and 2000 ....................................     13
        Statements of Consolidated Cash Flow for the years ended
           October 31, 2001, 2000 and 1999...............................     14
        Notes to Consolidated Financial Statements.......................     15
     Statement of Financial Reporting Responsibility.....................     38
     Independent Auditors' Report........................................     39
     Supplementary Financial Data........................................     40


<PAGE>
                 Navistar Financial Corporation and Subsidiaries
             Statements of Consolidated Income and Retained Earnings
                               Millions of Dollars
                         For the years ended October 31
<TABLE>
<S>                                                                             <C>               <C>               <C>
                                                                                2001              2000              1999
---------------------------------------------------------------------------------------------------------------------------
Revenues
              Retail Notes  . . . . . . . . . . . . . . . . . . . .           $ 81.4            $ 79.3            $ 84.9
              Lease Financing . . . . . . . . . . . . . . . . . . .             99.2              93.5              76.4
              Wholesale Notes . . . . . . . . . . . . . . . . . . .             46.2              64.4              62.8
              Accounts  . . . . . . . . . . . . . . . . . . . . . .             28.4              42.9              35.6
              Servicing Fee Income  . . . . . . . . . . . . . . . .             26.6              27.1              21.9
              Marketable Securities . . . . . . . . . . . . . . . .             22.6               0.6               0.4
                          Total . . . . . . . . . . . . . . . . . .            304.4             307.8             282.0

Expenses
              Cost of Borrowing
                          Interest Expense. . . . . . . . . . . . .             92.9             104.1              88.6
                          Other . . . . . . . . . . . . . . . . . .              9.2               5.8               6.1
                          Total . . . . . . . . . . . . . . . . . .            102.1             109.9              94.7
              Credit, Collection and Administrative . . . . . . . .             41.2              38.8              40.6
              Provision for Losses on Receivables . . . . . . . . .             27.8              12.1               6.2
              Depreciation Expense and Other. . . . . . . . . . . .             61.0              55.1              44.1
                          Total . . . . . . . . . . . . . . . . . .            232.1             215.9             185.6

Income Before Taxes . . . . . . . . . . . . . . . . . . . . . . . .             72.3              91.9              96.4

Taxes on Income . . . . . . . . . . . . . . . . . . . . . . . . . .             26.1              35.5              37.1

Income from Continuing Operations . . . . . . . . . . . . . . . . .             46.2              56.4              59.3
Gain (loss) on Disposal of Discontinued Operations,
              (net of tax of $(5.1), $6.4 and $0.0) . . . . . . . .              8.3             (10.5)                -
Income from Discontinued Operations,
              (net of tax of $0.0, $(0.1) and $(1.8) ). . . . . . .               -                0.5               3.2
Income (loss) from Discontinued Operations. . . . . . . . . . . . .              8.3             (10.0)              3.2
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . .             54.5              46.4              62.5

Retained Earnings
              Beginning of Year . . . . . . . . . . . . . . . . . .            134.9             111.2             109.0
              Dividends Paid. . . . . . . . . . . . . . . . . . . .            (26.0)            (22.7)            (60.3)
              End of Year . . . . . . . . . . . . . . . . . . . . .           $163.4            $134.9            $111.2

             Statements of Consolidated Comprehensive Income
---------------------------------------------------------------------------------------------------------------------------
For the years ended October 31                                                  2001              2000              1999
---------------------------------------------------------------------------------------------------------------------------
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . .           $ 54.5            $ 46.4            $ 62.5
Other comprehensive loss, net of tax:
              Net unrealized losses on marketable securities
              (net of tax of $0.0, $0.0, and $1.9)  . . . . . . . .                -                 -              (3.2)
              Net unrealized losses on derivative contracts
              (net of tax of $0.6, $0.0, and $0.0). . . . . . . . .             (1.6)                -                 -
              Minimum pension liability adjustment
              (net of tax of $0.0, $0.2, and $0.1)  . . . . . . . .                -              (0.3)             (0.2)
Other comprehensive loss, net of tax. . . . . . . . . . . . . . . .             (1.6)             (0.3)             (3.4)
Comprehensive Income. . . . . . . . . . . . . . . . . . . . . . . .           $ 52.9            $ 46.1            $ 59.1

See Notes to Consolidated Financial Statements.
</TABLE>

<PAGE>
                 Navistar Financial Corporation and Subsidiaries
                 Statements of Consolidated Financial Condition
                               Millions of Dollars
                                As of October 31
<TABLE>
<S>                                                                          <C>                 <C>
                                                                                2001              2000
-------------------------------------------------------------------------------------------------------

ASSETS

Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . .           $ 22.3            $ 41.6
Receivables
              Finance Receivables . . . . . . . . . . . . . . . . .          1,092.8           1,679.0
              Allowance for Losses. . . . . . . . . . . . . . . . .            (13.3)            (12.9)
                          Receivables, Net. . . . . . . . . . . . .          1,079.5           1,666.1

Amounts Due from Sales of Receivables . . . . . . . . . . . . . . .            323.5             316.5
Net Investment in Operating Leases. . . . . . . . . . . . . . . . .            283.8             291.1
Repossessions . . . . . . . . . . . . . . . . . . . . . . . . . . .             77.7              42.4
Restricted Marketable Securities. . . . . . . . . . . . . . . . . .            213.7              85.2
Other Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . .             48.5              27.2
Net Assets of Discontinued Operations . . . . . . . . . . . . . . .             61.9              48.8

Total Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . .         $2,110.9          $2,518.9

LIABILITIES AND SHAREOWNER'S EQUITY

Net Accounts Payable to Affiliates. . . . . . . . . . . . . . . . .           $ 14.2            $266.4
Other Liabilities . . . . . . . . . . . . . . . . . . . . . . . . .             90.6              50.0
Senior and Subordinated Debt. . . . . . . . . . . . . . . . . . . .          1,652.6           1,874.0
Dealers' Reserves . . . . . . . . . . . . . . . . . . . . . . . . .             22.2              24.1

Commitments and Contingencies . . . . . . . . . . . . . . . . . . .                -                 -

Shareowner's Equity
              Capital Stock (Par value $1.00, 1,600,000 shares
                issued and outstanding) and paid-in capital . . . .            171.0             171.0
              Retained Earnings . . . . . . . . . . . . . . . . . .            163.4             134.9
              Accumulated Other Comprehensive Loss. . . . . . . . .             (3.1)             (1.5)
                          Total . . . . . . . . . . . . . . . . . .            331.3             304.4

Total Liabilities and Shareowner's Equity . . . . . . . . . . . . .         $2,110.9          $2,518.9

See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>

                 Navistar Financial Corporation and Subsidiaries
                      Statements of Consolidated Cash Flow
                               Millions of Dollars
                         For the years ended October 31
<TABLE>
<S>                                                                             <C>                <C>               <C>
                                                                                2001              2000              1999
------------------------------------------------------------------------------------------------------------------------

Cash Flow From Operations
              Net Income. . . . . . . . . . . . . . . . . . . . . .            $54.5             $46.4             $62.5
              Adjustment to reconcile net income to
              cash provided from operations:
              (Gain) loss on disposal of discontinued
               operations, net of tax . . . . . . . . . . . . . . .             (8.3)             10.5                 -
              Gains on sales of receivables . . . . . . . . . . . .            (20.5)             (2.5)            (11.5)
              Depreciation and amortization . . . . . . . . . . . .             61.7              56.0              47.1
              Provision for losses on receivables . . . . . . . . .             27.8              12.1               6.2
              (Decrease) increase in accounts payable to affiliates           (252.2)           (440.5)            570.1
              Other . . . . . . . . . . . . . . . . . . . . . . . .              2.9              (3.7)            (15.6)
                          Total . . . . . . . . . . . . . . . . . .           (134.1)           (321.7)            658.8

Cash Flow From Investing Activities
              Proceeds from sold retail notes . . . . . . . . . . .          1,238.7             958.0           1,191.6
              Purchase of retail notes and lease receivables. . . .           (886.5)         (1,375.9)         (1,417.2)
              Principal collections on retail notes and
                 lease receivables. . . . . . . . . . . . . . . . .              5.1             131.1              88.1
              (Repurchase of) proceeds from sold wholesale notes, net         (226.1)            282.2                 -
              Acquisitions under (over) cash collections of
                 wholesale notes and accounts receivable. . . . . .            284.1             216.1            (410.3)
              Proceeds from sold retail accounts. . . . . . . . . .            120.0              80.0                 -
              Net (purchase)/sale or maturities of restricted
                 marketable securities. . . . . . . . . . . . . . .           (128.5)            (85.2)                -
              Purchase of equipment leased to others. . . . . . . .           (110.2)            (98.6)           (108.7)
              Sale of equipment leased to others. . . . . . . . . .             61.0              21.2              15.2
                          Total . . . . . . . . . . . . . . . . . .            357.6             128.9            (641.3)

Cash Flow From Financing Activities
              Net (decrease) increase in short-term debt. . . . . .                -             (34.5)             12.7
              Net (decrease) increase in bank revolving
                 credit facility usage. . . . . . . . . . . . . . .           (203.0)             55.0              25.0
              Proceeds from revolving retail warehouse facility . .                -             500.0                 -
              Net (decrease) increase in asset-backed
                 commercial paper facility usage. . . . . . . . . .                -            (358.9)              4.4
              Principal payments on long-term debt. . . . . . . . .           (136.0)            (80.9)           (133.3)
              Proceeds from long-term debt. . . . . . . . . . . . .            121.3             136.9             159.7
              Dividends paid to International . . . . . . . . . . .            (26.0)            (22.7)            (60.3)
                          Total . . . . . . . . . . . . . . . . . .           (243.7)            194.9               8.2

(Decrease) increase in Cash and Cash Equivalents from
   Continuing Operations. . . . . . . . . . . . . . . . . . . . . .            (20.2)              2.1              25.7
Net Cash from Discontinued Operations . . . . . . . . . . . . . . .              0.9               0.5              (0.6)
Cash and Cash Equivalents at Beginning of Year. . . . . . . . . . .             41.6              39.0              13.9
Cash and Cash Equivalents at End of Year. . . . . . . . . . . . . .            $22.3             $41.6             $39.0

Supplementary disclosure of cash flow information:
              Interest paid . . . . . . . . . . . . . . . . . . . .            $94.5            $102.8             $92.3
              Income taxes paid . . . . . . . . . . . . . . . . . .            $16.0             $37.8             $36.5

See Notes to Consolidated Financial Statements.
</TABLE>

<PAGE>

                 NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   FOR THE THREE YEARS ENDED OCTOBER 31, 2001

                               MILLIONS OF DOLLARS


1. SUMMARY OF ACCOUNTING POLICIES


Principles of Consolidation

     The  consolidated  financial  statements  include the  accounts of Navistar
Financial  Corporation  and  its  wholly-owned   subsidiaries   ("Corporation").
International   Truck  and  Engine  Corporation   ("International"),   which  is
wholly-owned by Navistar International Corporation  ("Navistar"),  is the parent
company  of  the  Corporation.   All  significant   intercompany   balances  and
transactions have been eliminated.

Nature of Operations

     The  Corporation  is a  commercial  financing  organization  that  provides
retail,  wholesale and lease financing of products sold by International and its
dealers within the United States.

Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

Revenue on Receivables

     Revenue from finance  receivables is recognized  using the interest method.
Revenue on operating leases is recognized on a straight-line basis over the life
of the lease. Recognition of revenue is suspended when management determines the
collection of future income is not probable.  Income  recognition  is resumed if
collection doubts are removed.

Net Investments in Operating Leases

     The Corporation  has significant  investments in the residual values of its
leasing  portfolio.  The residual values  represent an estimate of the values of
the assets at the end of the lease contracts and are initially recorded based on
estimates  of  future  market  values.  Realization  of the  residual  values is
dependent on the Corporation's  future ability to market the vehicles under then
prevailing  conditions.  Management  reviews  residual  values  periodically  to
determine that recorded  amounts are  appropriate and the operating lease assets
have not been impaired.  Each of these assets is depreciated on a  straight-line
basis  over the term of the lease in an amount  necessary  to reduce  the leased
vehicle to its estimated residual value at the end of the lease term.
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


1. SUMMARY OF ACCOUNTING POLICIES (continued)


Allowance for Losses on Receivables

     The allowance for losses on receivables is established  through a charge to
the provision for losses. The allowance is an estimate of the amount required to
absorb  losses  on  existing  receivables  that may  become  uncollectible.  The
allowance  is  maintained  at an  amount  management  considers  appropriate  in
relation  to the  outstanding  receivables  portfolio  based on such  factors as
overall  portfolio  quality,  historical  loss  experience and current  economic
conditions.  Receivables  are charged off to the  allowance  for losses when the
receivable is determined to be uncollectible.

     Under various agreements, International and its dealers may be liable for a
portion of  customer  losses or may be required to  repurchase  the  repossessed
collateral at the receivable  principal value. The Corporation's  losses are net
of these benefits.

Repossessions

     Losses  arising from the  repossession  of  collateral  supporting  finance
receivables and operating leases are recognized upon  repossession.  Repossessed
assets  are  recorded  at the  lower of  historical  cost or fair  value and are
reclassified from finance  receivables or operating leases to repossessions with
the related adjustments recorded in provision for losses on receivables.

Receivable Sales

     The  Corporation  securitizes  and sells  receivables to public and private
investors  with  limited  recourse.  The  Corporation  continues  to service the
receivables, for which a servicing fee is received. Servicing fees are earned on
a level  yield  basis over the terms of the  related  sold  receivables  and are
included in servicing fee income.  Gains or losses on sales of  receivables  are
credited or charged to financing revenue in the period in which the sales occur.
An adequate  allowance  for credit  losses is provided  prior to the  receivable
sale.  Interest-only strip receivables are recorded at estimated fair value. The
difference between market value and cost for interest-only  strip receivables is
recorded within comprehensive income, net of related taxes.  Differences between
market value and cost were immaterial during fiscal year 2001 and 2000.

Income Taxes

     Navistar  and its  subsidiaries  file a  consolidated  federal  income  tax
return, which includes  International and the Corporation.  Federal income taxes
for the Corporation are computed on a separate consolidated return basis and are
payable to International.
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


1. SUMMARY OF ACCOUNTING POLICIES (continued)


Cash and Cash Equivalents

     Cash and  cash  equivalents  include  money  market  funds  and  marketable
securities with original maturities of three months or less.

Restricted Marketable Securities

     On October 16, 2000, Truck Retail Instalment Paper Corporation  ("TRIP"), a
special  purpose  wholly-owned  subsidiary  of the  Corporation,  issued $475 of
senior  class AAA  rated and $25 of  subordinated  class A rated  floating  rate
asset-backed notes. The proceeds were used to purchase eligible receivables from
the  Corporation  and establish a revolving  retail  warehouse  facility for the
Corporation's  retail  notes and retail  leases,  other than fair  market  value
leases.  The Corporation is required to maintain the revolving  retail warehouse
facility  with  collateral  in the amount of $500. In the event that retail note
and lease balances pledged to the revolving retail warehouse facility fall below
$500,  the excess  proceeds are  invested in  marketable  securities,  which are
restricted  and have  maturities of three months or less.  Due to the short-term
nature of these  marketable  securities,  the fair value  approximates  carrying
value.

Derivative Financial Instruments

     On  November  1, 2000,  the  Corporation  adopted  Statement  of  Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities",   as  amended.  This  statement  standardizes  the  accounting  for
derivative  instruments by requiring that an entity recognize all derivatives as
assets or liabilities  in the statement of financial  condition and measure them
at fair value.  When certain criteria are met, it also provides for matching the
timing of gain or loss recognition on the derivative hedging instrument with the
recognition  of (a) the  changes  in the fair  value or cash flows of the hedged
asset or liability attributable to the hedged risk or (b) the earnings effect of
the hedged forecasted transaction.

     All derivative financial instruments,  such as forward contracts,  interest
rate swaps and interest rate caps, are held for purposes other than trading. The
Corporation's policy prohibits the use of derivative  financial  instruments for
speculative  purposes.  The  Corporation  generally  uses  derivative  financial
instruments to reduce its exposure to interest rate volatility.

     The Corporation may use forward contracts to hedge future interest payments
on the notes and  certificates  related to an expected sale of receivables.  The
principal balance of receivables  expected to be sold by the Corporation  equals
or exceeds the notional  amount of open forward  contracts.  The Corporation may
use  interest  rate swaps to reduce  exposure to interest  rate  changes when it
sells fixed rate receivables on a variable rate basis.
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


1. SUMMARY OF ACCOUNTING POLICIES (continued)


Derivative Financial Instruments (continued)

     For the protection of investors, the Corporation may enter into an interest
rate cap when fixed rate  receivables  are sold on a variable  rate  basis.  The
Corporation  will make payments  under the terms of the written caps if interest
rates exceed certain levels.

     All  derivative  instruments  are  recorded at their fair value.  For those
instruments which do not qualify for hedge accounting, changes in fair value are
recognized in income.

New Accounting Standards

     On April 1, 2001 the Corporation adopted Statement of Financial  Accounting
Standards No. 140,  "Accounting for Transfers and Servicing of Financial  Assets
and Extinguishments of Liabilities".  The adoption of this statement has not had
and is not expected to have a material  effect on the  Corporation's  results of
operations,  financial  condition  or  cash  flows.  We  have  included  certain
disclosures to comply with the requirements of this new statement.

Reclassification

     Certain  prior year  amounts  have been  reclassified  to conform  with the
presentation used in the 2001 financial statements.


2. TRANSACTIONS WITH AFFILIATED COMPANIES


Wholesale Notes, Wholesale Accounts and Retail Accounts

     In accordance with the agreements between the Corporation and International
relating  to  financing  of  wholesale  notes,  wholesale  accounts  and  retail
accounts,  the Corporation receives interest income from International at agreed
upon interest  rates applied to the average  outstanding  balances less interest
amounts  paid  by  dealers  on  wholesale  notes  and  wholesale  accounts.  The
Corporation  purchases  wholesale notes and accounts from  International  at the
principal amount of the receivables.  Revenue  collected from  International was
$51.3 in 2001, $85.6 in 2000 and $71.5 in 1999.

Retail Notes and Lease Financing

     In accordance  with agreements  between the Corporation and  International,
International  may be liable for certain losses on the finance  receivables  and
may be required to  repurchase  the  repossessed  collateral  at the  receivable
principal value.  Losses recorded by International  were $37.3 in 2001, $22.5 in
2000 and $3.5 in 1999.
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


2. TRANSACTIONS WITH AFFILIATED COMPANIES (continued)


Support Agreements

     Under  provisions  of certain  public and private  financing  arrangements,
agreements  with  International  and  Navistar  provide  that the  Corporation's
consolidated  income before interest expense and income taxes will be maintained
at  not  less  than  125%  of  its  consolidated  interest  expense.  No  income
maintenance  payments were required  during the three-year  period ended October
31, 2001.

Administrative Expenses

     The Corporation pays a fee to  International  for data processing and other
administrative  services  based on the actual  cost of services  performed.  The
amount of the fee was $2.5,  $3.0,  and $2.6 in 1999 for fiscal  2001,  2000 and
1999, respectively.

Accounts Payable

     Accounts  payable to  affiliates,  which are  obligated  to be repaid  upon
request,  were $14.2,  $266.4,  and $706.9 at October 31, 2001,  2000, and 1999,
respectively. Accounts payable to affiliates reduced debt levels and resulted in
a reduction in borrowing costs of $3.9,  $15.9 and $12.5 for fiscal 2001,  2000,
and 1999, respectively.

3.  DISCONTINUED OPERATIONS


     On  November  30,  2000,  the  Corporation's  Board of  Directors  approved
management's plan for the sale of Harco National  Insurance  Company  ("Harco"),
the  wholly-owned  insurance  subsidiary.  On November 30, 2001, the Corporation
completed  the sale of all of the  stock of Harco to IAT  Reinsurance  Syndicate
Ltd.,  a Bermuda  reinsurance  company.  Cash  proceeds  of $62.2  million  were
received on November 30, 2001.

     Harco provides  commercial physical damage and liability insurance coverage
to  International's  dealers and retail  customers,  and to the  general  public
through an  independent  insurance  agency  system.  Harco  generates  its funds
through internal operations and has no external  borrowings.  Insurance premiums
written by Harco are earned on a pro rata basis over the terms of the  policies.
Commission  costs and premium taxes incurred in acquiring  business are deferred
and  amortized on the same basis as related  premiums are earned.  The liability
for  unpaid  insurance  claims  includes  provisions  for  reported  claims  and
estimates of unreported claims based on past experience. Such provisions include
an estimate of loss  adjustment  expense.  The  estimated  liability  for unpaid
insurance claims is regularly reviewed and updated.  Any change in such estimate
is reflected in current operations. Harco limits its exposure on any single loss
occurrence by obtaining reinsurance from other insurance enterprises.
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


3.  DISCONTINUED OPERATIONS (continued)


     The Harco insurance  segment is accounted for as a discontinued  operation,
and  accordingly,  amounts in the  consolidated  financial  statements and notes
thereto  for all  periods  shown  have been  restated  to  reflect  discontinued
operations  accounting.  The net  assets  of Harco  have been  reflected  in the
consolidated  balance  sheet  at  net  realizable  value  and  consisted  of the
following at October 31:
<TABLE>
<S>                                                         <C>             <C>
                                                            2001            2000
---------------------------------------------------    ------------    ------------

Marketable securities, at fair value...............       $121.3          $110.4
Reinsurance receivables............................         20.1            27.0
Other assets.......................................         23.6            17.8
  Total assets.....................................        165.0           155.2

Insurance reserves and unearned premiums...........         88.4            90.6
Other liabilities..................................          7.6             3.4
  Total liabilities................................         96.0            94.0

Net assets.........................................         69.0            61.2

Adjustment to net realizable value.................        ( 7.1)          (12.4)

Net assets of discontinued operations..............       $ 61.9          $ 48.8
</TABLE>


     Below are the  components  of the gain (loss) on  disposal  recorded in the
Statement of Consolidated Income and Retained Earnings
<TABLE>
<S>                                                                      <C>           <C>           <C>
                                                                         2001          2000         Total
--------------------------------------------------------------------------------------------------------------

     Estimated gain(loss) on sale.............................          $13.1        $(11.9)        $ 1.2
     Estimated severance and other exit costs.................            0.3         ( 3.8)         (3.5)
     Curtailment loss.........................................              -         ( 1.2)         (1.2)

     Pretax gain(loss) on disposal............................           13.4         (16.9)         (3.5)
     Deferred tax (expense) benefit...........................          ( 5.1)          6.4           1.3

         Total gain(loss) on Disposal of
         Discontinued Operations..............................          $ 8.3        $(10.5)        $(2.2)
</TABLE>


     The pretax loss on disposal of Harco is estimated to be approximately  $3.5
and includes the estimated gain on sale of $1.2, approximately $3.5 of severance
and other exit costs,  and $1.2 of curtailment  loss associated with the related
future  reduction of employees  from the  Corporation's  postretirement  benefit
plans.

     Revenues of Harco were  $61.6,  $55.9 and $44.2 for fiscal  2001,  2000 and
1999, respectively.
<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


4. FINANCE RECEIVABLES


     Finance receivable balances,  net of unearned finance income, at October 31
are summarized as follows:

                                                             2001           2000
--------------------------------------------------------------------------------

Retail notes                                               $634.1       $1,050.5

Lease financing...................................          211.5          223.7

Wholesale notes...................................           31.7           82.3

Accounts:
     Retail                                                 137.1          249.6
     Wholesale....................................           78.4           72.9
         Total....................................          215.5          322.5
              Total finance receivables...........       $1,092.8       $1,679.0

     Contractual  maturities of finance  receivables  including unearned finance
income at October 31, 2001, are summarized as follows:

<TABLE>
<S>                                                     <C>             <C>             <C>               <C>
                                                       Retail           Lease           Wholesale        Accounts
--------------------------------------------------- -------------- ----------------- ---------------- ---------------

Due in fiscal year:
    2002   .......................................     $  218.6         $  16.8           $ 26.5         $ 215.5
    2003   .......................................        160.1            40.3              5.2               -
    2004   .......................................        142.7            69.3                -               -
    2005   .......................................        108.8            61.0                -               -
    2006   .......................................         71.9            47.3                -               -
Due after 2006....................................         18.9            12.6                -               -
       Gross finance receivables..................        721.0           247.3             31.7           215.5
Unearned finance income...........................        (86.9)          (35.8)               -               -
       Total finance receivables..................       $634.1         $ 211.5           $ 31.7         $ 215.5
</TABLE>

     The actual cash  collections  from  finance  receivables  may vary from the
contractual cash flows because of sales,  prepayments,  extensions and renewals.
The contractual maturities,  therefore,  should not be regarded as a forecast of
future collections.

     The  Corporation's  primary  business is to provide  wholesale,  retail and
lease   financing   for  new  and  used   trucks  sold  by   International   and
International's  dealers,  and as a result,  the  Corporation's  receivables and
leases have significant  concentration in the trucking industry. On a geographic
basis, there is not a disproportionate  concentration of credit risk in any area
of the United States. The Corporation  retains as collateral a security interest
in the equipment associated with wholesale notes, retail notes and leases.
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


4. FINANCE RECEIVABLES (continued)

     The  Corporation   securitizes  and  sells  receivables   through  Navistar
Financial  Retail   Receivables   Corporation   ("NFRRC"),   Navistar  Financial
Securities Corporation ("NFSC"),  Truck Retail Accounts Corporation ("TRAC") and
Truck Engine Receivables Financing Corporation ("TERFCO"),  all special purpose,
wholly-owned subsidiaries of the Corporation.  NFRRC, NFSC, TRAC and TERFCO have
limited  recourse on the sold  receivables  and their  assets are  available  to
satisfy the claims of their creditors  prior to such assets  becoming  available
for their own uses or to the Corporation or affiliated  companies.  The terms of
receivable  sales  generally  require the  Corporation to maintain cash reserves
with the trusts and  conduits as credit  enhancement.  The use of cash  reserves
held by the trusts and conduits is restricted under the terms of the securitized
sales  agreements.  The maximum  exposure  under all  receivable  sale  recourse
provisions  at October 31, 2001 was $340.2;  however,  management  believes  the
recorded reserves for losses are adequate.

     The Corporation continues to service the receivables, for which a servicing
fee is received. Servicing fees are earned on a level yield basis over the terms
of the  related  sold  receivables  and are  included in  servicing  fee income.
Servicing fees are typically set at 1.0% of average  outstanding  net receivable
balances,   representing  the  Corporation's  estimated  costs  to  service  the
receivables.

     Gains or  losses  on sales of  receivables  are  estimated  based  upon the
present value of future  expected cash flows using  assumptions  for  prepayment
speeds and current market interest  rates.  These  assumptions use  management's
best estimates  commensurate  with the risks  involved.  An allowance for credit
losses is provided prior to the receivable  sale and is  reclassified to Amounts
Due from Sales of Receivables upon sale.

     Finance  receivable  balances  do  not  include  receivables  sold  by  the
Corporation to public and private  investors with limited  recourse  provisions.
Outstanding sold receivable balances at October 31 are as follows:

                                           2001                2000
---------------------------------------------------------------------

Retail notes.......................     $1,862.6            $1,730.2
Wholesale notes....................        797.3               883.0
Retail accounts....................        191.3                80.0
     Total.........................     $2,851.2            $2,693.2

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


4. FINANCE RECEIVABLES (continued)

     Additional  financial  data for gross  serviced  finance  receivables as of
October 31, 2001 is as follows:

<TABLE>
<S>                                                <C>             <C>            <C>            <C>

                                                   Retail                       Wholesale
                                                   Notes          Leases          Notes          Accounts
                                               -------------     ----------     ----------     -------------
Gross serviced finance
   receivables................................   $2,720.1          $531.2         $817.4           $415.5
Gross serviced finance
   receivables with
   installments past due
          over 30 days........................          -               -            7.1             18.3
          over 60 days........................       25.4            12.5              -                -
Credit losses net of
   recoveries.................................       21.5             1.9            0.6                -
</TABLE>


     In fiscal 2001,  the  Corporation  sold  $1,365.0 of retail  notes,  net of
unearned finance income, through NFRRC, in three separate sales. The Corporation
sold $765.0 of retail notes in November  2000 to an owner trust which,  in turn,
issued  securities that were sold to investors.  The Corporation  sold $200.0 of
retail notes in December 2000 to a multi-seller  asset-backed  commercial  paper
conduit  sponsored  by a major  financial  institution.  During the three months
ended June 2001, the  Corporation  sold $400.0 of retail notes to an owner trust
which,  in turn,  issued  $400.0 of  asset-backed  securities  that were sold to
investors. Aggregate gains of $20.5 were recognized on these sales.

     At October 31,  2001,  NFSC has in place a revolving  wholesale  note trust
that  provides for the funding of $1,012.0 of eligible  wholesale  notes.  As of
October 31, 2001 the trust is  comprised  of three  $200.0  tranches of investor
certificates  maturing  in 2003,  2004 and 2008,  a $212.0  tranche of  investor
certificates  maturing in 2005 and a variable funding certificate with a maximum
capacity of $200.0.  This facility  expires in January 2002,  with an option for
renewal.  TERFCO has in place a revolving trust that provides for the funding of
$100.0 of  eligible  Ford  accounts  receivables.  TRAC has in place a revolving
retail  account  conduit  that  provides  for the  funding of $100.0 of eligible
retail accounts.
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


4. FINANCE RECEIVABLES (continued)

     When  receivables  are  sold,  the  Corporation  retains  interest  in  the
securitized  receivables in the form of interest-only strips,  servicing rights,
cash reserve accounts and subordinated certificates.  The following is a summary
of  retained  interests  included in Amounts  Due from Sales of  Receivables  at
October 31:
<TABLE>
<S>                                                                             <C>           <C>
                                                                                2001          2000
---------------------------------------------------------------------------------------------------

Cash held and invested by trusts........................................      $146.6        $136.6
Subordinated retained interests in wholesale receivables................       127.1         142.5
Subordinated retained interests in retail receivables...................        56.4          50.6
Interest only receivables...............................................        10.1           0.1
Allowance for credit losses.............................................       (16.7)        (13.3)
     Total..............................................................      $323.5        $316.5
</TABLE>


     The fair  value of cash  deposits  included  in  amounts  due from sales of
receivables  approximate their carrying value due to their short-term nature and
variable interest rate terms. The subordinated  retained  interests in wholesale
and retail  receivables  principally  consist of wholesale  notes or  marketable
securities, retail accounts and certain cash collections on finance receivables.
Due to the  short-term  nature  of  these  assets  the fair  value  approximates
carrying value.

     Key economic  assumptions  used in measuring the interest only strip at the
date of the securitization for securitizations  completed during the fiscal year
and at October 31, 2001 for all outstanding securitizations, were as follows:

<TABLE>
<S>                                                                     <C>                        <C>
                                                                    At date of                At October 31,
                                                                  Securitization                   2001
                                                              ------------------------    ------------------------
                                                              ------------------------    ------------------------

      Prepayment speed...............................                1.4 - 1.6                   1.1 - 1.3
      Weighted average remaining life................                41 months                   25 months
      Residual cash flows discount rate..............              7.85% - 9.61%               6.41% - 9.61%
</TABLE>

     The impact of hypothetical 10% and 20% adverse changes in these assumptions
would have no material effect on the fair value of the interest only receivables
at October 31, 2001.  These  sensitivities  are  hypothetical and should be used
with caution.  The effect of a variation of a particular  assumption on the fair
value of the interest only receivables is calculated  without changing any other
assumption; in reality, changes in one factor may result in changes in another.
<PAGE>




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


4. FINANCE RECEIVABLES (continued)

     The following table  summarizes  certain cash flows received from and (paid
to) securitization trusts/conduits during the year ended October 31, 2001:

                                                                    ($ Millions)
                                                                    ------------
Proceeds from initial sales of retail receivables................      $1,390.4
Proceeds from subsequent sales of receivables into
  revolving facilities............................................      5,063.8
Servicing fees received..........................................          26.6
All other cash received from trusts..............................         192.8
Purchase of delinquent or foreclosed receivables.................         (96.3)
Cash used for pool buybacks......................................        (220.8)


5. INVESTMENT IN OPERATING LEASES


     Operating leases at year-end were as follows:
                                                        2001             2000
--------------------------------------------------------------------------------

Investment in operating leases:
   Vehicles and other equipment, at cost.......        $405.1           $409.7
   Less:  Accumulated depreciation.............        (121.3)          (118.6)
      Net investment in operating leases.......        $283.8           $291.1

     Future minimum  rentals on operating  leases are as follows:  2002,  $85.0;
2003, $71.6; 2004, $54.7; 2005, $30.6; 2006, $17.3 and $7.8 thereafter.

6. ALLOWANCE FOR LOSSES


     The allowance for losses on receivables is summarized as follows:
<TABLE>
<S>                                                                <C>           <C>           <C>
                                                                   2001          2000          1999
--------------------------------------------------------------------------------------------------------

Total allowance for losses at beginning of year.............      $26.2         $26.2         $25.4
Provision for losses........................................       27.8          12.1           6.2
Net losses charged to allowance.............................      (24.0)        (12.1)         (5.4)
         Total allowance for losses at end of year..........      $30.0         $26.2         $26.2

Allowance pertaining to:
     Owned notes............................................      $13.3         $12.9         $13.4
     Sold notes.............................................       16.7          13.3          12.8
         Total..............................................      $30.0         $26.2         $26.2

</TABLE>
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

7. TAXES ON INCOME


     Taxes on income at October 31 are summarized as follows:
<TABLE>
<S>                                                       <C>           <C>           <C>
                                                          2001          2000          1999
-----------------------------------------------------------------------------------------------
Current:
     Federal.........................................    $14.5         $26.9         $30.6
     State and local.................................      5.6           4.5           4.9
         Total current...............................     20.1          31.4          35.5

Deferred (primarily Federal).........................     11.1          (2.2)          3.4
         Sub-total...................................     31.2          29.2          38.9
Less amount from Discontinued Operations                   5.1          (6.3)          1.8
         Total.......................................    $26.1         $35.5         $37.1
</TABLE>

     The effective tax rate of approximately 36%, 38% and 38% in the years ended
October 31, 2001, 2000 and 1999, respectively, differs from the statutory United
States  Federal  tax rate of 35%  primarily  because  of state and local  income
taxes. The net deferred tax liability from continuing  operations is included in
other  liabilities  on the Statements of Financial  Condition.  Net deferred tax
assets of $1.2 and $1.6 at October 31, 2001 and 2000, respectively, are included
in net assets from  discontinued  operations on the  Statements of  Consolidated
Financial Condition. Deferred tax assets and liabilities at October 31 comprised
of the following:
                                                              2001         2000
--------------------------------------------------------------------------------
Deferred tax assets:
     Other postretirement benefits.....................      $ 4.4        $ 3.6
     Loss on disposal of discontinued operations.......          -          6.4
         Total deferred tax assets.....................        4.4         10.0
Deferred tax liabilities:
     Loss on disposal of discontinued operations.......        0.6            -
     Depreciation and other............................       19.4         14.1
         Total deferred tax liabilities................       20.0         14.1
         Net deferred tax liabilities..................      $15.6        $ 4.1

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS



8. SENIOR AND SUBORDINATED DEBT


     Senior and  subordinated  debt  outstanding  at October 31 is summarized as
follows:
                                                             2001          2000
--------------------------------------------------------------------------------

Bank revolving credit facility, at variable
     rates, due November 2005..........................    $ 692.0       $ 895.0

Funding under revolving retail warehouse facility,
     at variable rates, due October 2005...............      500.0         500.0

Capital lease obligations, 4.11% to 6.65%,
     due serially through 2007.........................      360.6         379.0

Senior Subordinated Notes, 9%, due June 2002...........      100.0         100.0
              Total senior and subordinated debt.......   $1,652.6      $1,874.0


     The weighted average interest rate on total debt, including short-term debt
and the effect of discounts and related amortization,  was 5.7% in 2001, 6.4% in
2000 and 5.6% in 1999. The aggregate annual  maturities and required payments of
senior and subordinated debt are as follows:

                   Fiscal year ended October 31

                   2002................................   $  204.3
                   2003................................      115.2
                   2004................................       72.6
                   2005................................      543.9
                   2006................................      712.0
                   2007 and thereafter.................        4.6
                      Total............................   $1,652.6

     At October 31, 2001, the Corporation had a $820.0  contractually  committed
bank  revolving  credit  facility that will mature in November  2005.  Under the
revolving credit  agreement,  Navistar's three Mexican finance  subsidiaries are
permitted to borrow up to $100.0 in the  aggregate,  which is  guaranteed by the
Corporation.

     At  October  31,  2001,  the  Corporation  had a  $500.0  revolving  retail
warehouse  facility  due in October  2005.  On October 16,  2000,  Truck  Retail
Instalment Paper Corporation ("TRIP"), a special purpose wholly-owned subsidiary
of the  Corporation,  issued  $475.0  of  senior  class  AAA  rated and $25.0 of
subordinated  class A rated floating rate asset-backed  notes. The proceeds were
used to purchase  eligible  receivables  from the  Corporation  and  establish a
revolving  retail  warehouse  facility  for the  Corporation's  retail notes and
retail leases, other than fair market value leases.
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


8. SENIOR AND SUBORDINATED DEBT (continued)


     Available  funding under the bank revolving credit facility,  the revolving
retail  warehouse  facility and the revolving  wholesale  note trust was $539.0.
When combined with unrestricted cash and cash equivalents,  $561.0 was available
to fund the general  business  purposes of the  Corporation at October 31, 2001.
Under  the terms of the bank  revolving  credit  facility,  the  Corporation  is
required to maintain a debt to tangible  net worth ratio of no greater  than 7.0
to 1 and a  interest  expense  to EBIT  ratio not to be less than 1.25 to 1. The
bank revolving credit agreement grants security  interests in substantially  all
of the Corporation's assets to the Corporation's debt holders. Compensating cash
balances are not required under the bank  revolving  credit  facility.  Facility
fees are paid quarterly regardless of usage.

     The Corporation enters into  sale/leaseback  agreements  involving vehicles
subject to retail finance and operating  leases with end users. The balances are
classified under senior and subordinated debt as capital lease  obligations.  In
connection  with the sale and  leaseback  of  certain of its  leasing  portfolio
assets, the Corporation and its subsidiary,  Harco Leasing,  Inc. ("HLC"),  have
established  Navistar  Leasing Company ("NLC"),  a Delaware  business trust. NLC
holds  legal title to leased  vehicles  and is the lessor on  substantially  all
leases  originated  by the  Corporation.  The  assets  of NLC have been and will
continue to be allocated into various  beneficial  interests  issued by NLC. HLC
owns  one  such  beneficial  interest  in NLC  and  HLC  has  transferred  other
beneficial   interests  issued  by  NLC  to  purchasers   under   sale/leaseback
agreements.   Neither  the  beneficial   interests  held  by  purchasers   under
sale/leaseback  agreements or the assets represented thereby, nor legal interest
in any assets of NLC, are available to HLC, the Corporation or its creditors.

9. POSTRETIREMENT BENEFITS


     The Corporation provides postretirement benefits to a substantial number of
its employees. Costs associated with postretirement benefits include pension and
postretirement  health care  expenses  for  employees,  retirees  and  surviving
spouses and dependents.

     Generally, the pension plans are non-contributory. The Corporation's policy
is to fund its  pension  plans  in  accordance  with  applicable  United  States
government regulations.  At October 31, 2001, all legal funding requirements had
been met.
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


9. POSTRETIREMENT BENEFITS (continued)


Postretirement Expense

     Net periodic benefit cost included in the Statements of Consolidated Income
is composed of the following:
<TABLE>
<S>                                             <C>         <C>           <C>           <C>          <C>        <C>
                                                      Pension Benefits                        Other Benefits
                                            -------------------------------------  -------------------------------------
                                                2001        2000         1999           2001         2000       1999
---------------------------------------------------------------------------------  -------------------------------------

Service cost for benefits
     earned during the period..............   $ 0.7       $ 0.7        $ 0.7         $ 0.5        $ 0.4     $ 0.3
Interest cost on obligation................     3.9         3.7          3.4           1.6          1.2       1.0
Net amortization costs and other...........     0.2         0.1          0.2           0.4            -       0.1
Less expected return on assets.............    (5.4)       (5.2)        (5.0)         (0.9)        (0.9)     (0.7)
Net postretirement
     (income) expense                         $(0.6)      $(0.7)       $(0.7)        $ 1.6        $ 0.7     $ 0.7
</TABLE>

     "Amortization  costs" include  amortization of cumulative  gains and losses
over the expected  remaining  service life of employees and  amortization of the
initial transition  liability over 15 years and amortization of plan amendments.
Plan amendments are recognized over the remaining service life of employees.
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


9. POSTRETIREMENT BENEFITS (continued)


Postretirement Expense (continued)

     The funded  status of the  Corporation's  plans as of October  31, 2001 and
2000  and  a  reconciliation  with  amounts  recognized  in  the  Statements  of
Consolidated Financial Condition are as follows:

<TABLE>
<S>                                                             <C>             <C>                    <C>            <C>
                                                                 Pension Benefits                       Other Benefits
                                                        -------------------------------      --------------------------------
                                                                2001            2000                  2001            2000
---------------------------------------------------------------------------------------      --------------------------------
Change in benefit obligation
Benefit obligation at beginning
   of year                                                     $50.3           $48.5                $ 21.0           $14.9
Service cost                                                     0.7             0.7                   0.5             0.4
Interest on obligation...............................            3.9             3.7                   1.6             1.2
Curtailment                                                        -             0.2                     -             1.0
Actuarial net loss (gain)............................            1.9             0.1                  (2.1)            4.0
Benefits paid                                                   (3.2)           (2.9)                 (0.5)           (0.5)
Benefit obligation at end of year....................          $53.6           $50.3                $ 20.5           $21.0

Change in plan asset
Fair value of plan assets at
   beginning of year.................................          $56.2           $53.9                $  8.0           $ 7.8
Actual return on plan assets.........................            0.7             4.9                  (1.5)            0.2
Employer contribution................................              -               -                   0.3             0.3
Benefits paid                                                   (2.8)           (2.6)                 (0.2)           (0.3)
Fair value of plan assets at
   year-end                                                    $54.1           $56.2                $  6.6           $ 8.0
Funded status                                                  $ 0.5           $ 5.9                $(13.9)         $(13.0)
Unrecognized actuarial net
   (gain) loss.......................................            2.6            (3.9)                  6.6             6.7
Unrecognized transition amount.......................            0.1             0.1                     -               -
Unrecognized prior service cost......................            0.4             0.6                     -               -
Net amount recognized................................          $ 3.6           $ 2.7                $ (7.3)          $(6.3)

Amounts recognized in the
   Statements of Consolidated
   Financial Condition
   consists of:
      Prepaid benefit cost...........................          $ 5.5           $ 4.6                 $   -           $   -
      Accrued benefit liability......................           (4.3)           (4.3)                 (7.3)           (6.3)
      Accumulated reduction in
         shareowner's equity.........................            2.4             2.4                     -               -
            Net amount recognized....................          $ 3.6           $ 2.7                $ (7.3)          $(6.3)

         The accumulated reduction in shareowner's equity is recorded in the Statements of Consolidated Financial Condition.
</TABLE>
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


9. POSTRETIREMENT BENEFITS (continued)


Postretirement Expense (continued)

     The sale of Harco  resulted in a curtailment  loss of  approximately  $1.0,
which is recorded as a part of the loss on disposal of  discontinued  operations
in the Statements of Consolidated Income.

     The projected benefit  obligation,  accumulated benefit obligation and fair
value of plan assets for the pension plan with accumulated  benefit  obligations
in excess of plan assets were $4.3, $4.3, and $0.0, respectively,  as of October
31, 2001, and $4.1, $4.1, and $0.0, respectively, as of October 31, 2000.

     The weighted  average rate  assumptions  used in  determining  expenses and
benefit obligations were:
<TABLE>
<S>                                                     <C>        <C>        <C>           <C>          <C>          <C>
                                                           Pension Benefits                        Other Benefits
                                                   ----------------------------------  --------------------------------------
                                                       2001       2000       1999          2001         2000         1999
-------------------------------------------------------------------------------------  --------------------------------------

Discount rate used to determine
   present value of benefit
   obligation at year-end.........................     7.4%       8.0%       7.8%           7.4%         8.2%         8.0%
Expected long-term rate of
   return on plan asset for
   the year                                            9.8%       9.8%       9.6%          10.8%        11.0%        10.8%
Expected rate of increase in
   future compensation levels.....................     3.5%       3.5%       3.5%           N/A          N/A          N/A

</TABLE>

     For 2001,  the weighted  average rate of increase in the per capita cost of
covered health care benefits is projected to be 11.0%.  The rate is projected to
decrease to 5.0% by the year 2007 and remain at that level each year thereafter.
The effect of changing the health care cost trend rate is as follows:

<TABLE>
<S>                                                    <C>                  <C>
                                                       1-Percentage-        1-Percentage-
                                                       Point Increase       Point Decrease
-------------------------------------------------------------------------------------------

 Effect on total of service and interest cost
    components.......................................       $0.4                $(0.3)
 Effect on postretirement benefit obligation.........        3.6                 (3.0)
</TABLE>
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


10. LEASES


     The Corporation is obligated under non-cancelable  operating leases for the
majority of its office  facilities.  These leases are  generally  renewable  and
provide that property taxes and maintenance  costs are to be paid by the lessee.
At October 31, 2001,  future  minimum  lease  commitments  under  non-cancelable
operating leases with remaining terms in excess of one year are as follows:

                    Year Ended October 31,
                    2002.............................      $ 1.7
                    2003.............................        1.7
                    2004.............................        1.5
                    2005.............................        1.4
                    2006.............................        1.1
                    Total............................      $ 7.4

     The total  operating  lease expense was $2.0 in 2001, $2.0 in 2000 and $2.0
in 1999.

11. SHAREOWNER'S EQUITY


     The number of authorized shares of capital stock as of October 31, 2001 and
2000, was 2,000,000 of which 1,600,000 shares were issued and  outstanding.  All
of the issued and  outstanding  capital stock is owned by  International  and no
shares are  reserved  for officers  and  employees,  or for  options,  warrants,
conversions and other rights.

     The components of accumulated  other  comprehensive  income (loss),  net of
taxes, are as follows:
<TABLE>
<S>                                                     <C>                  <C>              <C>               <C>
                                                         Net
                                                      Unrealized             Net                            Accumulated
                                                         Gains            Unrealized        Minimum            Other
                                                     (Losses) on          Losses on         Pension        Comprehensive
                                                      Securities         Derivatives       Liability       Income (Loss)
-----------------------------------------------------------------------------------------------------------------------------

Balance at October 31, 1998......................         $2.5                 -            $(1.0)            $ 1.5
     Change in 1999..............................         (3.2)                -             (0.2)             (3.4)
Balance at October 31, 1999......................         (0.7)                -             (1.2)             (1.9)
     Change in 2000..............................            -                 -             (0.3)             (0.3)
     Reclass to loss on disposal
       of Discontinued Operations................          0.7                 -                -               0.7
Balance at October 31, 2000......................            -                 -             (1.5)             (1.5)
     Change in 2001..............................            -             $(1.6)               -              (1.6)
Balance at October 31, 2001......................         $  -             $(1.6)           $(1.5)            $(3.1)
</TABLE>
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


12. FINANCIAL INSTRUMENTS


Fair Value of Financial Instruments

     The  carrying  amounts  and  estimated  fair  values  of the  Corporation's
financial instruments were as follows:
<TABLE>
<S>                                                          <C>              <C>          <C>            <C>
                                                                     2001                           2000
                                                        ----------------------------   ----------------------------
                                                           Carrying          Fair         Carrying         Fair
                                                             Value          Value          Value           Value
------------------------------------------------------------------------------------   ----------------------------

Financial assets:
     Finance receivables:
         Retail notes................................       $634.1          $664.8      $ 1,050.5      $ 1,036.6
         Wholesale notes and accounts................        247.2           247.2          404.8          404.8
     Amounts due from sales of
         receivables.................................        323.5           323.5          316.5          316.5


Financial liabilities:
     Senior and subordinated debt,
         excluding capital lease
         obligations.................................      1,292.0         1,292.4        1,495.0        1,494.9
</TABLE>

     The carrying amount of cash and cash equivalents approximates fair value.

     The fair  value of retail  notes is  estimated  by  discounting  the future
contractual cash flows using an estimated discount rate reflecting current rates
paid to purchasers of similar types of receivables with similar credit, interest
rate and  prepayment  risks.  For  wholesale  notes  and  retail  and  wholesale
accounts,  all of which reprice monthly,  the carrying amounts  approximate fair
value as a result of the short-term nature of the receivables.

     The fair  value of cash  deposits  included  in  amounts  due from sales of
receivables  approximate their carrying value due to their short-term nature and
variable interest rate terms. The subordinated  retained  interests in wholesale
and retail  receivables  principally  consist of wholesale  notes or  marketable
securities, retail accounts and certain cash collections on finance receivables.
Due to the  short-term  nature  of  these  assets  the fair  value  approximates
carrying  value.  The fair value of the interest only  receivables is derived by
discounting the expected future cash flows at estimated current market rates.

     For fixed rate debt,  the fair value is  estimated  based on quoted  market
prices where available and, where not available, on quoted market prices of debt
with similar characteristics. For variable rate debt the fair values approximate
their carrying value.

     The estimated fair values for all other financial  instruments  approximate
their carrying  values due to the short-term  nature or variable  interest terms
inherent in the financial instruments.


<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


12. FINANCIAL INSTRUMENTS (continued)


Derivatives Held or Issued for Purposes Other Than Trading

     The  Corporation  manages its exposure to fluctuations in interest rates by
limiting  the  amount  of fixed  rate  assets  funded  with  variable  rate debt
generally  by  selling  fixed  rate  receivables  on a fixed  rate  basis and by
utilizing   derivative   financial   instruments.   These  derivative  financial
instruments may include forward contracts, interest rate swaps and interest rate
caps. The fair value of these  instruments  is estimated  based on quoted market
prices and is subject to market risk as the instruments may become less valuable
due to changes in market  conditions or interest rates. The Corporation  manages
exposure to  counter-party  credit risk by entering  into  derivative  financial
instruments  with major  financial  institutions  that can be  expected to fully
perform under the terms of such  agreements.  The  Corporation  does not require
collateral or other security to support  derivative  financial  instruments with
credit risk. The Corporation's  counter-party  credit exposure is limited to the
fair value of contracts  with a positive  fair value at the  reporting  date. At
October 31, 2001,  the  Corporation's  derivative  financial  instruments  had a
negative  net fair  value.  Notional  amounts  are used to measure the volume of
derivative financial instruments and do not represent exposure to credit loss.

     The Corporation enters into derivative financial  instruments to manage its
exposure to  fluctuations  in the fair value of retail notes  anticipated  to be
sold. The  Corporation  manages such risk by entering into forward  contracts to
sell fixed debt  securities  or forward  interest rate swaps whose fair value is
highly correlated with that of the Corporation's  receivables.  For transactions
which qualify for hedge accounting the fair value of the derivatives is deferred
until the designated  loans are sold.  Gains or losses incurred with the closing
of these  agreements  are included as a component of the gain or loss on sale of
receivables.  As of October 31, 2001,  there were no such  derivative  financial
instruments open.

     In November 1998, the Corporation  sold fixed rate retail  receivables to a
multi-seller   asset-backed  commercial  paper  conduit  sponsored  by  a  major
financial institution on a variable rate basis. For the protection of investors,
the  Corporation  issued an interest  rate cap. The  notional  amount of the cap
amortizes based on the expected outstanding principal balance of the sold retail
receivables.  Under the terms of the cap agreement,  the  Corporation  will make
payments if interest rates exceed certain levels. As of October 31, 2001 the cap
had a notional amount of $138.0 and had an immaterial fair value.
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


12. FINANCIAL INSTRUMENTS (continued)

     In November 1999, the Corporation  sold fixed rate retail  receivables on a
variable rate basis and entered into an amortizing  interest rate swap agreement
to fix the future cash flows of interest  paid to  lenders.  In March 2000,  the
Corporation  transferred  all the rights and obligations of the swap to the bank
conduit.  The notional  amount of the  amortizing  swap is based on the expected
outstanding principal balance of the sold retail receivables. Under the terms of
the  agreement,  the  Corporation  will make or  receive  payments  based on the
differential  between the  transferred  swap notional amount and the outstanding
principal balance of the sold retail receivables. The net settlement is included
in retail  notes  revenue.  As of October  31, 2001 the  difference  between the
amortizing swap notional amount and the net outstanding principal balance of the
sold  retail  receivables  was  $32.0  and had a fair  value of  $1.0,  which is
recorded  in  other  liabilities  on the  Statement  of  Consolidated  Financial
Condition.

     In October 2000,  the  Corporation  entered into a $500.0 retail  revolving
facility as a method to fund retail  notes and finance  leases prior to the sale
of receivables.  Under the agreements of this facility,  the  Corporation  sells
fixed rate retail  notes or finance  leases to the conduit and pays  investors a
floating rate of interest.  As required by the rating agencies,  the Corporation
purchased an interest  rate cap to protect  investors  against  rising  interest
rates.  To  offset  the  economic  cost of this  cap,  the  Corporation  sold an
identical  interest rate cap. As of October 31, 2001 the interest rate caps each
had a notional amount of $500.0 and a net fair value of zero.

     In December 2000, the Corporation  sold fixed rate retail  receivables on a
variable rate basis and entered into an interest rate swap agreement.  Under the
terms of the agreement,  the Corporation  will make or receive payments based on
the   differential   between  the  transferred  swap  notional  amount  and  the
outstanding  principal balance of the sold retail  receivables and on changes in
the interest rates.  The net settlement is included in retail notes revenue.  As
of October 31, 2001 the difference  between the amortizing  swap notional amount
and the net  outstanding  principal  balance of the sold retail  receivables was
$3.0 and had an immaterial fair value.

     In July 2001, the Corporation  entered into an interest rate swap agreement
to fix a portion of its  floating  rate  revolving  debt.  This  transaction  is
accounted for as a cash flow hedge,  and  consequently,  gains and losses on the
derivative  are recorded in other  comprehensive  income.  Derivative  gains and
losses are  reclassified  from  other  comprehensive  income as the hedged  item
affects earnings. There was no ineffectiveness related to this derivative during
fiscal  2001.  As of October 31,  2001,  the  interest  rate swap had a notional
amount of $35.0 and a fair value of $2.0, which is recorded in other liabilities
on the Statement of Consolidated Financial Condition.
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


13. LEGAL PROCEEDINGS

     The Corporation is subject to various claims arising in the ordinary course
of business, and is party to various legal proceedings which constitute ordinary
routine litigation incidental to the business of the Corporation. In the opinion
of the  Corporation's  management,  none of  these  proceedings  or  claims  are
material to the business or the financial condition of the Corporation.


14. SUBSEQUENT EVENTS

     Over the period November 1, through December 10, 2001, the Corporation sold
$470.0 million of retail notes, net of unearned finance income, through NFRRC to
an owner trust which, in turn, issued securities which were sold to investors. A
$16.2 million gain was recognized on this sale.

15. QUARTERLY FINANCIAL INFORMATION  (unaudited)

<TABLE>
                                                                           2001
                                        -------------- --------------- -------------- ------------- --------------
<S>                                          <C>            <C>             <C>           <C>           <C>
                                             1st            2nd             3rd           4th          Fiscal
                                           Quarter        Quarter         Quarter       Quarter         Year
--------------------------------------- -------------- --------------- -------------- ------------- --------------

Results of Continuing Operations
    Revenues..........................       $84.3          $82.3           $69.6          $68.2        $304.4
    Interest expense..................        30.0           24.8            20.8           17.3          92.9
    Provision for losses
       on receivables.................         6.5            7.6             6.1            7.6          27.8
Income from Continuing
    Operations........................        12.8           12.8             9.3           11.3          46.2
Loss on Disposal of
    Discontinued Operations...........         -              -               -              8.3           8.3
Net income............................        12.8           12.8             9.3           19.6          54.5
</TABLE>
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS


15. QUARTERLY FINANCIAL INFORMATION  (unaudited) (Continued)
<TABLE>
<S>                                          <C>            <C>             <C>           <C>           <C>
                                                                           2000
                                        -------------- --------------- -------------- ------------- -------------
                                             1st            2nd             3rd           4th          Fiscal
                                           Quarter        Quarter         Quarter       Quarter         Year
--------------------------------------- -------------- --------------- -------------- ------------- -------------
Results of Continuing Operations
    Revenues..........................       $74.8          $73.6           $77.1          $82.3       $307.8
    Interest expense..................        24.0           23.0            26.8           30.3         104.1
    Provision for losses
       on receivables.................         1.4            2.3             3.0            5.4          12.1
Income from Continuing
    Operations........................        16.0           14.1            14.2           12.1          56.4
Loss on Disposal of
    Discontinued Operations...........           -              -               -          (10.5)        (10.5)
Income (loss) from Discontinued
    Operations........................         1.2            0.1             -             (0.8)          0.5
Net income............................        17.2           14.2            14.2            0.8          46.4
</TABLE>


<PAGE>

                 Navistar Financial Corporation and Subsidiaries


                 Statement of Financial Reporting Responsibility


     Management  of  Navistar  Financial  Corporation  and its  subsidiaries  is
responsible  for the  preparation  and for the integrity and  objectivity of the
accompanying  financial  statements  and  other  financial  information  in this
report.  The  financial   statements  have  been  prepared  in  accordance  with
accounting  principles  generally  accepted in the United  States of America and
include amounts that are based on management's estimates and judgments.

     The  accompanying  financial  statements  have been  audited by  Deloitte &
Touche LLP,  independent  auditors.  Management has made available to Deloitte &
Touche LLP all the Corporation's  financial records and related data, as well as
the minutes of Directors' meetings. Management believes that all representations
made to Deloitte & Touche LLP during its audit were valid and appropriate.

     Management is  responsible  for  establishing  and  maintaining a system of
internal controls throughout its operations that provides  reasonable  assurance
as to the integrity and reliability of the financial statements,  the protection
of assets from  unauthorized use and the execution and recording of transactions
in accordance with management's  authorization.  The system of internal controls
which  provides  for  appropriate  division of  responsibility  is  supported by
written policies and procedures that are updated by management as necessary. The
system is tested  and  evaluated  regularly  by the  parent  Company's  internal
auditors as well as by the independent  auditors in connection with their annual
audit of the financial statements.  The independent auditors conduct their audit
in accordance with auditing standards generally accepted in the United States of
America  and  perform  such  tests of  transactions  and  balances  as they deem
necessary. Management considers the recommendations of its internal auditors and
independent  auditors  concerning the Corporation's  system of internal controls
and takes the necessary actions that are  cost-effective in the circumstances to
respond appropriately to the recommendations presented. Management believes that
the Corporation's  system of internal  controls  accomplishes the objectives set
forth in the first sentence of this paragraph.



    John J. Bongiorno
    President and Chief Executive Officer




    Ronald D. Markle
    Vice President and Controller
<PAGE>

                 Navistar Financial Corporation and Subsidiaries


                          Independent Auditors' Report


Navistar Financial Corporation:

We have audited the accompanying  consolidated  financial statements of Navistar
Financial Corporation (the "Corporation") and its subsidiaries as of October 31,
2001 and 2000 and for each of the three  years in the period  ended  October 31,
2001,  listed  in  Item  8.  These  consolidated  financial  statements  are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the  accompanying  consolidated  financial  statements  present
fairly, in all material  respects,  the financial position of Navistar Financial
Corporation and its subsidiaries as of October 31, 2001 and 2000 and the results
of their  operations  and their  cash  flow for each of the  three  years in the
period ended October 31, 2001 in conformity with accounting principles generally
accepted in the United States of America.




    /s/DELOITTE & TOUCHE LLP
       Deloitte & Touche LLP
       December 10, 2001
       Chicago, Illinois
<PAGE>


                          SUPPLEMENTARY FINANCIAL DATA


                Five Year Summary of Financial and Operating Data

                           Dollar amounts in millions



<TABLE>
<S>                                                       <C>           <C>            <C>           <C>            <C>
                                                          2001          2000          1999          1998           1997
---------------------------------------------------------------------------------------------------------------------------
Results of Continuing
 Operations:
     Revenues.................................        $  304.4      $  307.8      $  282.0      $  234.3       $  193.5
     Net income ..............................            46.2          56.4          59.3          48.9           41.8
     Dividends paid ..........................            26.0          22.7          60.3          57.0           40.0

     Percent of net income to
         average shareowner's
         equity...............................            14.8%         18.9%         21.0%         17.1%          14.7%

 Financial Data:
     Finance receivables, net ................        $1,079.5      $1,666.1      $2,062.5      $1,510.9       $1,211.2
     Total assets ............................         2,110.9       2,518.9       2,769.9       2,127.8        1,719.4

     Total debt ..............................         1,652.6       1,874.0       1,710.3       1,633.0        1,223.7
     Shareowner's equity .....................           331.3         304.4         280.3         281.5          287.8

     Debt to equity ratio ....................           5.0:1         6.2:1         6.1:1         5.8:1          4.3:1
     Senior debt to capital
         funds ratio..........................           3.6:1         4.4:1         4.2:1         3.1:1          2.1:1


 Number of employees at
     October 31...............................             311           291           307           300            270


Results of Discontinued
 Operations:
     Revenues.................................         $  61.6       $  55.9       $  44.2       $  41.6        $  41.4
     Net income ..............................             6.4           0.5           3.2           4.0            3.9

 Number of employees at
     October 31...............................              78            94            92            94             88

</TABLE>
<PAGE>


                    SUPPLEMENTARY FINANCIAL DATA (Continued)


<TABLE>

Gross Finance Receivables and Leases Acquired
<S>                                                       <C>             <C>          <C>             <C>         <C>
($ Millions)                                              2001          2000          1999          1998          1997
------------------------------------------------------------------------------------------------------------------------

Wholesale notes...............................        $2,803.7      $4,119.3      $4,188.5      $3,812.8      $2,772.8

Retail notes and leases:
     New                                                 963.1       1,561.4       1,519.7       1,358.0         976.2
     Used ....................................           228.3         268.6         286.4         309.2         270.3
         Total................................         1,191.4       1,830.0       1,806.1       1,667.2       1,246.5

     Total ...................................        $3,995.1      $5,949.3      $5,994.6      $5,480.0      $4,019.3




Serviced (including sold notes) Retail Notes and
Leases With Installments Past Due Over 60 Days

At October 31 ($ Millions)                                2001          2000          1999          1998          1997
------------------------------------------------------------------------------------------------------------------------

Original amount of notes
     and leases...............................          $ 72.3        $ 91.7        $ 40.4        $ 33.6        $ 31.8
Balance of notes and leases...................            37.8          46.3          17.9          16.5          16.2
Balance as a percent of
     total outstanding........................            1.12%         1.26%         0.53%         0.57%         0.64%




Retail Note and Lease Repossessions (including sold notes)

                                                          2001          2000          1999          1998          1997
------------------------------------------------------------------------------------------------------------------------

Retail note and lease
     repossessions acquired as
     a percentage of average
     serviced retail note and
     lease balances...........................           4.47%         2.80%         1.82%          2.26%        2.69%
</TABLE>
<PAGE>



                    SUPPLEMENTARY FINANCIAL DATA (Continued)



<TABLE>

Credit Loss Experience on Serviced (including sold notes) Receivables

<S>                                                       <C>            <C>          <C>           <C>          <C>
($ Millions)                                              2001          2000          1999          1998          1997
------------------------------------------------------------------------------------------------------------------------


Net losses (recoveries):
     Retail notes and leases .................           $23.4         $12.2          $5.5          $ .2          $2.2
     Wholesale notes .........................             0.6             -           (.2)          (.3)          (.2)
     Accounts                                                -          (0.1)           .1             -             -
         Total ...............................           $24.0         $12.1          $5.4          $(.1)         $2.0


Percent net losses (recoveries)
  to liquidations:
     Retail notes and leases .................            1.52%          .82%          .41%          .02%          .18%
     Wholesale notes .........................            0.02             -             -          (.01)         (.01)
         Total ...............................            0.52%          .21%          .10%            -           .05%


Percent net losses (recoveries)
  to related average gross
  receivables outstanding:
     Retail notes and leases .................            0.68%          .36%          .18%          .01%          .09%
     Wholesale notes .........................            0.06          (.02)         (.02)         (.04)         (.02)
     Accounts                                                -          (.02)          .02             -             -
         Total ...............................            0.50%          .30%          .12%            -           .06%

</TABLE>

<PAGE>


Item 9.  Changes in and Disagreements With Accountants on Accounting and
         Financial Disclosure

          None

                                    PART III


Items 10, 11, 12 and 13

     Intentionally omitted. See the index page of this Report for explanation.

                                    PART IV


Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

Financial Statements

     See Index to Financial Statements in Item 8.

Financial Statement Schedules

     All schedules are omitted  because of the absence of the  conditions  under
which  they are  required  or  because  information  called  for is shown in the
financial statements and notes thereto.

Exhibits, Including Those Incorporated By Reference

     See Index to Exhibits.

Reports on Form 8-K

     The Registrant filed the following reports on Form 8-K for the three months
ended October 31, 2001:

     (i)  Form 8-K dated  August 6,  2001,  discloses  the  Supplement  No. 1 to
          Indenture  agreement,  dated as of July 24,  2001,  among Truck Retail
          Instalment  Paper  Corp.  and  The  Bank of New  York,  to  amend  the
          Indenture to (i) revise the  definition of "Series 2000-1 Loss Reserve
          Specified Balance", and (ii) revise the Amortization Events.
<PAGE>

                                   SIGNATURE




     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                         NAVISTAR FINANCIAL CORPORATION
                                  (Registrant)




By:   /s/Ronald D. Markle                                      December 17, 2001
         Ronald D. Markle
         Vice President and Controller
         (Principal Accounting Officer)

<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                                                                      Exhibit 24
                                POWER OF ATTORNEY

     Each person whose signature appears below does hereby make,  constitute and
appoint John J. Bongiorno, Ronald D. Markle and Steven K. Covey and each of them
acting individually,  true and lawful attorneys-in-fact and agents with power to
act without the other and with full power of substitution,  to execute,  deliver
and  file,  for and on such  person's  behalf,  and in such  person's  name  and
capacity or capacities as stated below, any amendment,  exhibit or supplement to
the Form 10-K Report making such changes in the report as such  attorney-in-fact
deems appropriate.

                                   SIGNATURES

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated:

<TABLE>
<S>     <C>                               <C>                              <C>
      Signature                          Title                            Date

/s/JOHN J. BONGIORNO          President and Chief Executive         December 17, 2001
   John J. Bongiorno          Officer; Director
                              (Principal Executive Officer)

/s/R. WAYNE CAIN              Senior Vice President and             December 17, 2001
   R. Wayne Cain              Treasurer; Director

/s/ANDREW J. CEDEROTH         Vice President and Treasurer;         December 17, 2001
   Andrew J. Cederoth         Director
                              (Principal Financial Officer)

/s/RONALD D. MARKLE           Vice President and Controller;        December 17, 2001
   Ronald D. Markle           Director
                              (Principal Accounting Officer)

/s/PHYLLIS E. COCHRAN         Vice President Operations;            December 17, 2001
   Phyllis E. Cochran         Director


/s/JOHN R. HORNE              Director                              December 17, 2001
   John R. Horne
</TABLE>



<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                             SIGNATURES (Continued)

<TABLE>
<S>     <C>                      <C>                                    <C>
       Signature                Title                                   Date

/s/THOMAS M. HOUGH             Director                             December 17, 2001
   Thomas M. Hough

/s/ROBERT C. LANNERT           Director                             December 17, 2001
   Robert C. Lannert


/s/MARK SCHWETSCHENAU          Director                             December 17, 2001
   Mark Schwetschenau
</TABLE>

<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                INDEX TO EXHIBITS


     The following documents of Navistar Financial  Corporation are incorporated
herein by reference:

3.1  Restated Certificate of Incorporation of Navistar Financial Corporation (as
     amended  and in  effect  on  December  15,  1987).  Filed on Form 8-K dated
     December 17, 1987. Commission File No. 1-4146-l.

3.2  The By-Laws of Navistar  Financial  Corporation  (as amended  February  29,
     1988).  Filed on Form 10-K dated  January  19,  1989.  Commission  File No.
     1-4146-1.

4.1  Indenture  dated as of May 30, 1997 by and between the  Corporation and The
     Fuji Bank and Trust Company,  as Trustee,  for 9% Senior Subordinated Notes
     due 2002 for $100,000,000. Filed on Registration No. 333-30167.

10.1 Master  Inter-company  Agreement  dated as of April 26,  1993,  between the
     Corporation  and  International.  Filed on Form 8-K dated  April 30,  1993.
     Commission File No. 1-4146-1.

10.2 Inter-company  Purchase  Agreement dated as of April 26, 1993,  between the
     Corporation and Truck Retail Instalment Paper Corp. Filed on Form 8-K dated
     April 30, 1993. Commission File No. 1-4146-1.

10.3 Pooling and Servicing  Agreement  dated as of June 8, 1995,  among Navistar
     Financial   Corporation,   as  Servicer,   Navistar  Financial   Securities
     Corporation,  as Seller,  The Chase  Manhattan Bank (survivor in the merger
     between The Chase  Manhattan  Bank and Chemical Bank which was the survivor
     in the  merger  between  Chemical  Bank  and  Manufacturers  Hanover  Trust
     Company),  as 1990 Trust Trustee, and The Bank of New York, as Master Trust
     Trustee. Filed on Registration No. 33-87374.

10.4 Series 1995-1 Supplement to the Pooling and Servicing Agreement dated as of
     June 8,  1995,  among the  Corporation,  as  Servicer,  Navistar  Financial
     Securities  Corporation,  as  Seller,  and The Bank of New York,  as Master
     Trust Trustee on behalf of the Series 1995-1 Certificate holders.  Filed on
     Registration No. 33-87374.
10.5 Purchase  Agreement  dated as of June 8, 1995,  between the Corporation and
     Navistar Financial Securities  Corporation,  as Purchaser,  with respect to
     the Dealer Note Master Trust. Filed on Registration No. 33-87374.
<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                INDEX TO EXHIBITS


10.6 Series 1997-1 Supplement to the Pooling and Servicing Agreement dated as of
     August  19,  1997,  among  Navistar  Financial  Corporation,  as  Servicer,
     Navistar Financial Securities  Corporation,  as Seller, and the Bank of New
     York,   as  Master   Trust   Trustee  on  behalf  of  the   Series   1997-1
     Certificateholders. Filed on Registration No. 333-30737.

10.7 Series 1998-1 Supplement to the Pooling and Servicing Agreement dated as of
     July 17, 1997, among Navistar Financial Corporation,  as Servicer, Navistar
     Financial Securities  Corporation,  as Seller, and the Bank of New York, as
     Master  Trust  Trustee on behalf of the Series  1998-1  Certificateholders.
     Filed on Registration No. 333-30737.
10.8 Purchase  Agreement  dated as of June 4, 1998,  between the Corporation and
     Navistar  Financial  Retail  Receivables  Corporation,  as Purchaser,  with
     respect to Navistar  Financial  1998-A  Owner  Trust,  as Issuer.  Filed on
     Registration No. 33-64249.

10.9 Pooling  and  Servicing  Agreement  dated  as of June 4,  1998,  among  the
     Corporation,   as  Servicer,  and  Navistar  Financial  Retail  Receivables
     Corporation,  as Seller,  and Navistar  Financial  1998-A  Owner Trust,  as
     Issuer. Filed on Registration No. 33-64249.

10.10Trust  Agreement  dated  as of June 4,  1998,  between  Navistar  Financial
     Retail  Receivables  Corporation,  as  Seller,  and  Chase  Manhattan  Bank
     Delaware, as Owner Trustee, with respect to Navistar Financial 1998-A Owner
     Trust. Filed on Registration No. 33-64249.

10.11Indenture  dated as of June 4,  1998,  between  Navistar  Financial  1998-A
     Owner Trust and The Bank of New York, as Indenture Trustee, with respect to
     Navistar Financial 1998-A Owner Trust. Filed on Registration No. 33-64249.

10.12Purchase  Agreement dated as of November 13, 1998,  between the Corporation
     and Navistar Financial Retail Receivables Corporation,  as Purchaser,  with
     respect to Navistar Financial 1998-B Multi-seller  Asset-backed  Commercial
     Paper  Conduit,  as  Issuer.  Filed on Form 8-K dated  December  18,  1998.
     Commission File No. 33-64249.

10.13Transfer  and  Administration  Agreement  dated as of  November  13,  1998,
     between  the  Corporation,  as  Servicer,  and  Navistar  Financial  Retail
     Receivables   Corporation,   as   Transferor,   Park   Avenue   Receivables
     Corporation,  as Purchaser,  and The Chase Manhattan Bank, as Funding Agent
     and APA Bank.  Filed on Form 8-K dated December 18, 1998.  Commission  File
     No. 33-64249.

<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                INDEX TO EXHIBITS


10.14Purchase  Agreement  dated as of June 3, 1999,  between the Corporation and
     Navistar  Financial  Retail  Receivables  Corporation,  as Purchaser,  with
     respect to Navistar  Financial  1999-A  Owner  Trust,  as Issuer.  Filed on
     Registration No. 333-62445.

10.15Pooling  and  Servicing  Agreement  dated  as of June 3,  1999,  among  the
     Corporation,   as  Servicer,  and  Navistar  Financial  Retail  Receivables
     Corporation,  as Seller,  and Navistar  Financial  1999-A  Owner Trust,  as
     Issuer. Filed on Registration No. 333-62445.

10.16Trust  Agreement  dated  as of June 3,  1999,  between  Navistar  Financial
     Retail  Receivables  Corporation,  as  Seller,  and  Chase  Manhattan  Bank
     Delaware, as Owner Trustee, with respect to Navistar Financial 1999-A Owner
     Trust. Filed on Registration No. 333-62445.

10.17Indenture  dated as of June 3,  1999,  between  Navistar  Financial  1999-A
     Owner Trust and The Bank of New York, as Indenture Trustee, with respect to
     Navistar Financial 1999-A Owner Trust. Filed on Registration No. 333-62445.

10.18Receivable  Purchase  Agreement  dated as of  November  12,  1999,  between
     Navistar   Financial  Retail  Receivables   Corporation,   as  Seller,  the
     Corporation,  as Servicer, and, Falcon Asset Securitization Corporation and
     International  Securitization Corporation, as investors, and Bank One NA as
     agent and as Securities  Intermediary,  with respect to Navistar  Financial
     1999-B  Multi-seller   Asset-backed  Commercial  Paper  Conduit.  Filed  on
     Registration No. 333-62445.

10.19Receivable Sale dated as of November 12, 1999,  between the Corporation and
     Navistar  Financial  Retail  Receivables  Corporation,  as Purchaser,  with
     respect to Navistar Financial 1999-B Multi-seller  Asset-backed  Commercial
     Paper Conduit, as Issuer. Filed on Registration No. 333-62445.

10.20Certificate  Purchase  Agreement  dated as of  January  28,  2000,  between
     Navistar Financial Securities Corporation,  as seller, the Corporation,  as
     Servicer, Receivable Capital Corporation, as the Conduit Purchaser, Bank of
     America, National Association,  as administrative Agent for the Purchasers,
     and Bank of America,  National Association,  as a Committed Purchaser filed
     on Form 8-K dated February 24, 2000. Commission File No. 333-30737.

10.21Purchase  Agreement dated as of March 9, 2000,  between the Corporation and
     Navistar  Financial  Retail  Receivables  Corporation,  as Purchaser,  with
     respect to Navistar  Financial  2000-A  Owner  Trust,  as Issuer.  Filed on
     Registration No. 333-62445.

<PAGE>
                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                INDEX TO EXHIBITS


10.22Pooling  and  Servicing  Agreement  dated as of March 9,  2000,  among  the
     Corporation,   as  Servicer,  and  Navistar  Financial  Retail  Receivables
     Corporation,  as Seller,  and Navistar  Financial  2000-A  Owner Trust,  as
     Issuer. Filed on Registration No. 333-62445.

10.23Trust  Agreement  dated as of March 9,  2000,  between  Navistar  Financial
     Retail  Receivables  Corporation,  as  Seller,  and  Chase  Manhattan  Bank
     Delaware, as Owner Trustee, with respect to Navistar Financial 2000-A Owner
     Trust. Filed on Registration No. 333-62445.

10.24Indenture  dated as of March 9, 2000,  between  Navistar  Financial  2000-A
     Owner Trust and The Bank of New York, as Indenture Trustee, with respect to
     Navistar Financial 2000-A Owner Trust. Filed on Registration No. 333-62445.

10.25Series 2000-1  Supplement to the Pooling and Servicing  Agreement  dated as
     of July 13,  2000,  among  Navistar  Financial  Corporation,  as  Servicer,
     Navistar Financial Securities  Corporation,  as Seller, and the Bank of New
     York,   as  Master   Trust   Trustee  on  behalf  of  the   Series   2000-1
     Certificateholders. Filed on Registration No. 333-32960.

10.26Purchase  Agreement  dated as of November 1, 2000,  between the Corporation
     and Navistar Financial Retail Receivables Corporation,  as Purchaser,  with
     respect to Navistar  Financial  2000-B  Owner  Trust,  as Issuer.  Filed on
     Registration No. 333-62445.
10.27Pooling and  Servicing  Agreement  dated as of November 1, 2000,  among the
     Corporation,   as  Servicer,  and  Navistar  Financial  Retail  Receivables
     Corporation,  as Seller,  and Navistar  Financial  2000-B  Owner Trust,  as
     Issuer. Filed on Registration No. 333-62445.

10.28Trust Agreement dated as of November 1, 2000,  between  Navistar  Financial
     Retail  Receivables  Corporation,  as  Seller,  and  Chase  Manhattan  Bank
     Delaware, as Owner Trustee, with respect to Navistar Financial 2000-B Owner
     Trust. Filed on Registration No. 333-62445.

10.29Indenture dated as of November 1, 2000,  between Navistar  Financial 2000-B
     Owner Trust and The Bank of New York, as Indenture Trustee, with respect to
     Navistar Financial 2000-B Owner Trust. Filed on Registration No. 333-62445.
10.30Servicing  Agreement dated as of October 16, 2000, between the Corporation,
     as Servicer, and Navistar Leasing Corporation, Harco Leasing Company, Inc.,
     Truck  Retail  Instalment  Paper Corp,  The Bank of New York as  Collateral
     Agent, and Bank One National Association, as Portfolio Trustee.
<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                INDEX TO EXHIBITS


10.31Receivables  Purchase Agreement dated as of October 16, 2000, between Truck
     Retail Instalment Paper Corp. and the Corporation.

10.32Indenture  Agreement  dated as of October 16,  2000,  between  Truck Retail
     Instalment  Paper Corp., as Issuer,  and The Bank of New York, as Indenture
     Trustee.

10.33Series  2000-1  Supplement  dated as of October 16, 2000,  to the Indenture
     also dated October 16, 2000 between Truck Retail Instalment Paper Corp., as
     Issuer, and The Bank of New York, as Indenture Trustee.

10.34Credit Agreement for $820,000,000  Revolving Credit and Competitive Advance
     Facility dated as of December 8, 2000, between the Corporation, Arrendadora
     Financiera Navistar,  S.A. DE C.V., Servicios Financieros Navistar, S.A. DE
     C.V. and Navistar  Comercial,  S.A. DE C.V.,  as  borrowers,  lenders party
     hereto,  The Chase Manhattan Bank as Administrative  Agent, Bank of America
     as Syndication Agent and Bank of Nova Scotia as Documentation Agent.

10.35Parents  Side  Agreement,  dated  as  of  December  8,  2000,  by  Navistar
     International Corporation,  and International Truck and Engine Corporation,
     for the  benefit  of the  Lenders  from  time to time  party to the  Credit
     Agreement referred to above.

10.36Guarantee,  dated as of  December 8, 2000,  made by Navistar  International
     Corporation, in favor of The Chase Manhattan Bank, as Administrative Agent,
     for the lenders  parties to the Credit  Agreement,  dated as of December 8,
     2000,  among Navistar  Financial  Corporation  and  Arrendadora  Financiera
     Navistar,  S.A. DE C.V., Servicios Financieros  Navistar,  S.A. DE C.V. and
     Navistar Comercial,  S.A. DE C.V., the Lenders,  Bank of America,  N.A., as
     syndication agent, The Bank of Nova Scotia, as documentation agent, and the
     Administrative Agent.

10.37Receivable  Purchase  Agreement  dated as of  December  21,  2000,  between
     Navistar   Financial  Retail  Receivables   Corporation,   as  Seller,  the
     Corporation,  as Servicer,  Thunder Bay Funding Inc., as company, and Royal
     Bank of  Canada  as  agent,  with  respect  to  Navistar  Financial  2000-C
     Multi-seller  Asset-backed  Commercial Paper Conduit. Filed on Registration
     No. 333-62449.

10.38Receivable Sale dated as of December 21, 2000, between the Corporation,  as
     Issuer,  and  Navistar  Financial  Retail   Receivables   Corporation,   as
     Purchaser. Filed on Registration No. 333-62449.


<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                INDEX TO EXHIBITS



10.39Purchase  Agreement dated as of April 27, 2001, between the Corporation and
     Navistar  Financial  Retail  Receivables  Corporation,  as Purchaser,  with
     respect to Navistar  Financial  2001-A  Owner  Trust,  as Issuer.  Filed on
     Registration No. 033-50291.

10.40Pooling  and  Servicing  Agreement  dated as of April 27,  2001,  among the
     Corporation,   as  Servicer,  and  Navistar  Financial  Retail  Receivables
     Corporation,  as Seller,  and Navistar  Financial  2001-A  Owner Trust,  as
     Issuer. Filed on Registration No. 033-50291.

10.41Trust  Agreement  dated as of April 27, 2001,  between  Navistar  Financial
     Retail  Receivables  Corporation,  as  Seller,  and  Chase  Manhattan  Bank
     Delaware, as Owner Trustee, with respect to Navistar Financial 2001-A Owner
     Trust. Filed on Registration No. 033-50291.

10.42Indenture dated as of April 27, 2001,  between  Navistar  Financial  2001-A
     Owner Trust and The Bank of New York, as Indenture Trustee, with respect to
     Navistar Financial 2001-A Owner Trust. Filed on Registration No. 033-50291.

10.43Supplement No. 1 to Indenture  agreement,  dated as of July 24, 2001, among
     Truck Retail  Instalment Paper Corp. and The Bank of New York, to amend the
     Indenture  to (i) revise the  definition  of "Series  2000-1  Loss  Reserve
     Specified  Balance",  and (ii) revise the Amortization Events filed on Form
     8-K dated August 6, 2001. Commission File No. 1-4146-1.

10.44Purchase  Agreement  dated as of November 1, 2001,  between the Corporation
     and Navistar Financial Retail Receivables Corporation,  as Purchaser,  with
     respect to Navistar  Financial  2001-B  Owner  Trust,  as Issuer.  Filed on
     Registration No. 033-50291.

10.45Pooling and  Servicing  Agreement  dated as of November 1, 2001,  among the
     Corporation,   as  Servicer,  and  Navistar  Financial  Retail  Receivables
     Corporation,  as Seller,  and Navistar  Financial  2001-B  Owner Trust,  as
     Issuer. Filed on Registration No. 033-50291.

10.46Trust Agreement dated as of November 1, 2001,  between  Navistar  Financial
     Retail  Receivables  Corporation,  as  Seller,  and  Chase  Manhattan  Bank
     Delaware, as Owner Trustee, with respect to Navistar Financial 2001-B Owner
     Trust. Filed on Registration No. 033-50291.

10.47Indenture dated as of November 1, 2001,  between Navistar  Financial 2001-B
     Owner Trust and The Bank of New York, as Indenture Trustee, with respect to
     Navistar Financial 2001-B Owner Trust. Filed on Registration No. 033-50291.